Synthomer agrees to acquire Omnova Solutions

Speciality chemicals company Synthomer has agreed to acquire Omnova Solutions as part of a $473m deal aimed at strengthening its global footprint.

Synthomer offered up $10.15 per Omnova share on Wednesday, a premium of 58% to the group's closing price in the previous session.

The FTSE 250 constituent will finance the deal through a rights issue of up to $257m and was expected to be completed by late 2019 or early 2020.

Following completion, Synthomer expects the deal to boost earnings in the first full financial year and anticipates annual pre-tax cost savings of $29.6m by the end of the third year.

Synthomer said adding Omnova to its portfolio would help it bolster its market share in Europe and Asia and help penetrate into China.

Chief executive Calum MacLean said: "This transaction is an important step in the continued execution of Synthomer's strategy with an acquisition that is both strategically and financially compelling.

"The acquisition provides an attractive financial profile with significant expected synergy benefits. Synthomer has been disciplined waiting for the right opportunity to deliver value through our inorganic growth strategy and this acquisition will provide an additional platform for Synthomer to continue to grow into the medium term."

Elsewhere, Omnova revealed that second-quarter profits had fallen over 33% to $5.6m on the back of volatile markets and challenging economic conditions.

As of 0840 BST, Synthomer shares had fallen 2.32% to 362.60p.