10.02.15
Kraton Performance Polymers, Inc., a global producer of highly-engineered polymers, announced that it has entered into a definitive agreement to acquire all of the capital stock of privately held Arizona Chemical Holdings Corporation for a cash purchase price of $1.37 billion. Arizona Chemical is a leading global producer of high-value performance products and specialty chemicals derived from non-hydrocarbon, renewable raw materials.
Arizona Chemical’s end use market exposure is highly complementary with that of Kraton, particularly in markets such as adhesives, roads and construction, coatings and oilfield chemicals.
“Our stockholders will benefit from identified pre-tax synergies of $65 million, which we expect to achieve by 2018,” said Kevin M. Fogarty, Kraton’s president and CEO. “Arizona Chemical has a stable and attractive margin profile, with adjusted EBITDA margins in excess of 20% over the past five years and an attractive cash flow profile. On a combined basis we expect to generate free cash flow of more than $450 million over the first three years of combined operations, which will be available for debt reduction and allocation to stockholders.”
The seller of Arizona Chemical is AZC Holding Company, LLC, which is principally owned by investment funds managed by American Securities LLC. The acquisition is subject to regulatory and other customary approvals and conditions and is currently expected to close in late 2015 or early 2016.
Arizona Chemical’s end use market exposure is highly complementary with that of Kraton, particularly in markets such as adhesives, roads and construction, coatings and oilfield chemicals.
“Our stockholders will benefit from identified pre-tax synergies of $65 million, which we expect to achieve by 2018,” said Kevin M. Fogarty, Kraton’s president and CEO. “Arizona Chemical has a stable and attractive margin profile, with adjusted EBITDA margins in excess of 20% over the past five years and an attractive cash flow profile. On a combined basis we expect to generate free cash flow of more than $450 million over the first three years of combined operations, which will be available for debt reduction and allocation to stockholders.”
The seller of Arizona Chemical is AZC Holding Company, LLC, which is principally owned by investment funds managed by American Securities LLC. The acquisition is subject to regulatory and other customary approvals and conditions and is currently expected to close in late 2015 or early 2016.