MOSCOW (MRC) -- Kraton Performance Polymers Inc. said Monday that it has agreed to buy closely held Arizona Chemical Holdings Corp. for USD1.37 billion in cash, said the Wall Street Journal.
Arizona Chemical makes chemicals found in things like breakfast cereal packaging and car tires from renewable materials. Kraton, which makes polymers used in products such as baby diaper elastic and roofing materials, said it expects the acquisition to diversify its markets.
The deal will also allow Kraton to reduce its overall exposure to hydrocarbon-based feedstocks, Chief Executive Kevin Fogarty said in a news release.
Kraton said it is targeting USD65 million in synergies by 2018 and expects the deal to add USD1.40 to its per-share earnings in the first full year after closing. The combined company had USD1.98 billion in revenue in the year ended June 30. Last year, Kraton posted USD1.23 billion in revenue.
The deal is expected to close by early next year. Kraton shares, down 12% this year, were inactive premarket.
As MRC wrote before, Kraton Performance Polymers announced the introduction of two new hydrogenated styrenic block copolymers (HSBCs).
Arizona Chemical is a market-driven global specialty chemicals company that manufactures and sells high-value performance products derived from pine wood pulping co-products. As the largest global provider in the pine chemicals industry, Arizona Chemical refines and further upgrades two primary feedstocks, crude tall oil and crude sulfate turpentine, into value added specialty products.
Kraton Performance Polymers, Inc., through its operating subsidiary Kraton Polymers LLC and its subsidiaries (collectively, "Kraton"), is a leading global producer of engineered polymers and one of the world's largest producers of styrenic block copolymers (SBCs), a family of products whose chemistry was pioneered by Kraton 50 years ago. Kraton's polymers are used in a wide range of applications, including adhesives, coatings, consumer and personal care products, sealants and lubricants, and medical, packaging, automotive, paving, roofing and footwear products.
MRC