Under the terms of the agreement Huntsman will pay approximately $1.1 billion in cash and assume unfunded pension liabilities estimated at $225 million as of June 30, 2013.
Peter R. Huntsman, President and CEO of Huntsman Corporation said, ““This acquisition provides a unique opportunity to unlock value within our Pigments business and builds on the strong improvements we have made to its competitiveness. With this combination we will be better positioned to serve customers through a broader product range including color pigments, functional additives and specialty TiO2 pigments. We will become the second largest global producer of TiO2 and inorganic color pigments.
“The transaction announced is the next step in our long term value creation strategy for our Pigments business. We anticipate TiO2 demand will continue to recover in the coming quarters, and during this time we will be focused on strengthening our world class Pigments business and capturing approximately $130 million in expected annual cost savings, to be fully achieved by the end of 2015. We plan to further unlock value through a public offering of our new combined Pigments business, which we expect t o pursue within two years of completing this acquisition.
“In addition to creating a $3 billion Pigments leader, we believe this public offering will allow greater investor focus and appreciation for our differentiated businesses. These remaining divisions continue to enjoy record financial performance and global growth.
“We are well on our way to capturing the previously announced $220 million in annual savings through restructuring in our existing business and we have a number of capital projects underway that will increase our future earnings potential. Reducing our financial leverage remains a priority and we expect to return to our debt/EBITDA target ratio of 2 to 2.5 times by 2015.”
The cash purchase price of $1.1 billion represents a multiple of 5.5 times estimated 2014 adjusted EBITDA of $200 million, or 3.3 times including $130 million in expected annual cost savings. The transaction will be immediately accretive to earnings per share, and is expected to add $0.60 annual per share accretion assuming 2014 estimated results and full impact of expected cost savings.
Rockwood’s Performance Additives and TiO2 business includes the manufacture and supply of sulphate process TiO2, synthetic iron-oxide and other organic pigments, timber treatment products and specialty automotive materials. Applications for these products are used in coatings, construction, concrete, plastics, papers, inks, food, cosmetics, pharmaceuticals, fibers and films.
Financing commitments are in place to fund the acquisition. The transaction remains subject to regulatory approvals and customary closing conditions and is expected to close in the first half of 2014.
Textiles | On 24th Mar 2017
Li & Fung Limited, the world's leader in consumer goods design,...
Apparel/Garments | On 24th Mar 2017
In a step towards using the internet to bring small businesses around ...
‘There is huge demand in the Indian lingerie market for non-wired styles.’
'Hugo Boss works with carefully selected sourcing partners'
Mohammad Mamun Ar Rashid
UL VS Bangladesh Ltd
Productivity, creativity and innovation play a vital role in the growth of ...
Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...
Iago Castro Asensio
RCfil Distribuciones S.L.
Iago Castro Asensio, International Business Manager of RCfil...
Steve Cole of Xerium Technologies discusses the industry. Xerium is the...
Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...
Golfwear and menswear brand Devereux is set for greener pastures. Robert...
Sonam and Paras Modi's Sva Couture is synonymous with head-turning...
Textiles | On 24th Mar 2017