Synthomer agrees to gobble up Hexion

FTSE 250 specialty chemicals company Synthomer announced the $226m (£156m) acquisition of Hexion Performance Adhesives & Coatings on Monday morning, to be completed this summer following regulatory approval and other conditions.

The purchase - to be funded through existing cash and additional credit facilities - would strengthen Synthomer's position in the performance adhesives and coatings market by adding Hexion's range of dispersions, additives, powder coatings and specialty monomers.

Hexion currently employed 750 people across seven sites in Europe, the US and Asia. In the year to 31 December it generated sales of $370m and EBITDA of $30m, and had gross assets of $149m.

Synthomer's board said the acquisition was expected to be earnings enhancing in the first full year, and confirmed Hexion's existing leadership team would transfer with the business to Synthomer.

"The acquisition of Hexion represents a further step forward in our strategy to continue to grow and develop the business," said Synthomer chief executive officer Calum MacLean.

"This acquisition strengthens our platform for continued growth in the global dispersions and additives market, and in particular expands our presence in the US and Asia.," he added.

At the same time, Synthomer's board said it had reached agreement to sell its dispersions business in South Africa to Ferro for £13m, following that division's declining EBITDA and cash flow performance in a competitive market.