09.30.14
Arkema has proposed an acquisition of Bostik, a worldwide provider of adhesives. An offer was made on the basis of €1.74 billion enterprise value, 11 times EBITDA.
This acquisition would allow Arkema to strengthen its position in the specialty chemicals market and to continue developing its High Performance Materials segment, which would account for 42% of total sales following the acquisition of Bostik. Since 2006, Arkema has carried out an in-depth transformation of its business portfolio with the aim of becoming a world leader in specialty chemicals. The proposed acquisition of Bostik represents a major milestone towards this ambition, the company said in a statement.
"The complementary nature of the two companies, the quality of Bostik’s management and teams, the common roots within the Total group, and the brands and technologies are all factors that will sustain value creation for our shareholders and ensure successful execution of the project," said Thierry Le Hénaff, Arkema Chairman and CEO. "For Arkema, this exciting challenge complements the ambitious plan currently in progress to establish acrylics and thiochemicals in Asia through the Jurong and Kerteh projects; restore the profitability of fluorogases; carry through its €100 million savings plan announced recently; and realize the strong growth prospects in the attractive oil and gas segment."
With the proposed acquisition of Bostik, Arkema would achieve proforma sales of nearly €7.6 billion while increasing its headcount to approximately 19,000 people. This project would also entail increasing the divestment program of non-core activities representing some €500 million additional sales. Taking into account the proposed acquisition of Bostik and the contemplated divestment program, the Group has raised its 2017 EBITDA target to €1.310 billion.
In order to preserve its financial flexibility, this project would be financed by a €350 million rights issue, the issuance of hybrid securities of between €600 and €700 million, and a senior bond issuance for the balance (i.e. between €500 and €600 million). The share capital increase would be made through preferential subscription rights for existing shareholders. These refinancing operations will be carried out at the earliest opportunity as the target is to go back close to a 40% gearing by 2017.
This project is subject to the legal information and consultation procedure involving the work councils of Arkema, Bostik and Total, as well as to the approval of the relevant antitrust authorities in the countries concerned.
This acquisition would allow Arkema to strengthen its position in the specialty chemicals market and to continue developing its High Performance Materials segment, which would account for 42% of total sales following the acquisition of Bostik. Since 2006, Arkema has carried out an in-depth transformation of its business portfolio with the aim of becoming a world leader in specialty chemicals. The proposed acquisition of Bostik represents a major milestone towards this ambition, the company said in a statement.
"The complementary nature of the two companies, the quality of Bostik’s management and teams, the common roots within the Total group, and the brands and technologies are all factors that will sustain value creation for our shareholders and ensure successful execution of the project," said Thierry Le Hénaff, Arkema Chairman and CEO. "For Arkema, this exciting challenge complements the ambitious plan currently in progress to establish acrylics and thiochemicals in Asia through the Jurong and Kerteh projects; restore the profitability of fluorogases; carry through its €100 million savings plan announced recently; and realize the strong growth prospects in the attractive oil and gas segment."
With the proposed acquisition of Bostik, Arkema would achieve proforma sales of nearly €7.6 billion while increasing its headcount to approximately 19,000 people. This project would also entail increasing the divestment program of non-core activities representing some €500 million additional sales. Taking into account the proposed acquisition of Bostik and the contemplated divestment program, the Group has raised its 2017 EBITDA target to €1.310 billion.
In order to preserve its financial flexibility, this project would be financed by a €350 million rights issue, the issuance of hybrid securities of between €600 and €700 million, and a senior bond issuance for the balance (i.e. between €500 and €600 million). The share capital increase would be made through preferential subscription rights for existing shareholders. These refinancing operations will be carried out at the earliest opportunity as the target is to go back close to a 40% gearing by 2017.
This project is subject to the legal information and consultation procedure involving the work councils of Arkema, Bostik and Total, as well as to the approval of the relevant antitrust authorities in the countries concerned.