Arkema to Acquire Controlling Stake in PI Advanced Materials

Arkema has proposed the acquisition of Glenwood Private Equity’s 54% stake in the listed South Korean company PI Advanced Materials (PIAM), for €728 million enterprise value. The company will be fully consolidated in Arkema’s accounts. This is a significant milestone in Arkema’s transformation into a pure specialty materials player.

With sales of more than €200 million and an EBITDA margin of approximately 30%, PIAM is a global leader in polyimide films, delivering superior growth in the attractive consumer electronics and electric vehicles markets.

PIAM’s sales expected to grow at 13% per year, driven by unique opportunities for polyimide in increasingly demanding applications such as lithium-ion batteries, 5G antennas, high resolution OLED displays or flexible screens, and supported by recent capacity expansions.

The transaction is fully financed in cash, maintaining a strong balance sheet with a net debt on EBITDA ratio within Arkema’s financial leverage objective of 2x.

“PIAM is an outstanding company with a unique technological positioning, state-of-the-art manufacturing facilities and invaluable customer relationships,” said Thierry Le Henaff, Arkema’s chairman and CEO. “This acquisition is fully aligned with our strategy to be at the forefront of high-performance materials for high growth end markets supported by megatrends such as electric vehicles and advanced electronics.

“After the divestment of PMMA, the acquisition of Ashland adhesives and the current start-up of our bio PA11 plant in Singapore, Arkema is delivering another significant milestone of its strategy focused on innovative materials for a sustainable world,” added Le Henaff.

With more than 30% global market share, PIAM, based in South Korea, is the global leader of polyimide films for flexible printed circuit boards and graphite sheets used in the high growth and high margin markets of mobile devices and electric vehicles.

PIAM’s ultra-high-performance polyimides are cutting-edge materials offering exceptionally high temperature resistance, dimensional stability, flexibility and electric insulation. They are increasingly used in attractive markets such as electric vehicles, consumer electronics, semiconductor manufacturing and other advanced industrial applications. They benefit from the growing need for miniaturization, higher thermal management and increased safety and durability.

With two state-of-the-art industrial production sites and two R&D centers in South Korea, this highly innovative company employs approximately 320 people. PIAM enjoyed strong sales growth of 12% per year on average in the 2012-2021 period, focusing on top quality and high value-added products, and reaching an EBITDA margin of 30%.

Sales amounted to approximately €200 million in 2022, temporarily impacted by the large destocking observed in the global consumer electronics market.

The acquisition of Glenwood Private Equity’s 54% controlling stake will allow the full consolidation of PIAM in Arkema’s accounts. The remaining 46% of the shares will continue to be listed on the Korean stock exchange.

PIAM’s portfolio fits perfectly with the Advanced Materials segment, strengthening the high-performance polymer range in attractive markets linked to megatrends, and enabling to accelerate the segment’s organic sales growth and expand its EBITDA margin.

Given PIAM’s best-in-class innovation, ultra-high performance product portfolio and leading position, this project is perfectly aligned with the group’s ambition to be a pure player in specialty materials and to pursue its development in fast-growing applications supported by megatrends.

The deal, which is subject to the approval of Chinese and Korean anti-trust authorities, should be finalized by the end of 2023.