Huntsman Corporation, a chemical manufacturing company, has recently entered an agreement to acquire a specialty chemical manufacturer, Gabriel Performance Products.
As per the terms of the recent agreement, Huntsman will make an all-cash transaction worth $250 million, funded by the available liquidity. The deal is subject to several customary closing adjustments. Additionally, it is expected to be closed in the Q1 of 2021, after gaining regulatory approvals.
In 2019, Gabriel had maintained revenue of over $106 million, with 3 manufacturing facilities in Rock Hill, South Carolina; Harrison City, Pennsylvania; and Ashtabula, Ohio. Based on 2019, the purchase price represented an adjusted EBITDA multiple of over 11x or nearly 8x pro forma for synergies.
According to Huntsman's President of Advanced Materials division, Scott Wright, the latest takeover deal will broaden the company’s specialty portfolio as well as is complementary to the acquisition of CVC Thermoset Specialties. Gabriel manufactures highly specialized curing and toughening agents & other additives, which gain widespread applications in a range of adhesive, composite, and coatings. This specialty chemical manufacturer is also expected to strengthen its North America footprint and offer significant commercial synergies as it expands and globalizes the specialty products to serve a large customer base. Additionally, the deal will surge the competitiveness and world-class formulation business by creating differentiation in customers' applications.
Huntsman’s CEO, President, & Chairman, Peter Huntsman, has reportedly cited that the company has completed various strategic initiatives in the Advanced Materials division, which was started in 2019 prior to the coronavirus outbreak. Despite the challenges posed by the pandemic, it is pleased to close two transactions or acquisitions of Gabriel and CVC. These deals have strengthened its Advanced Material's portfolio as well as increased its offerings in the market. Based on the 2019 results, it added an adjusted EBITDA pro forma for synergies of $57 million to its Advanced Materials division for less than 5x EBITDA.