Given PIAM's best-in-class innovation, ultra-high performance product portfolio and leading position, this project is perfectly aligned with the Group's ambition to be a pure player in Specialty Materials and to pursue its development in fast-growing applications supported by megatrends.
The project offers significant pre-tax synergies estimated at around '30 million at the EBITDA level, which should be progressively achieved within the next five years, with a limited requirement for additional capital expenditure. These synergies are driven by the perfect complementarities of product ranges, Arkema's geographic reach and PIAM's strong customer intimacy in Asia.
The transaction price is based on a '728 million enterprise value for the 54% stake, representing c.20x the average / EBITDA. The enterprise value/EBITDA multiple will be reduced to 8x in with the benefit of PIAM's organic growth and of the targeted synergies and will continue to decrease over the following years. The deal will be financed fully in cash, maintaining a strong balance sheet with a level of net debt including hybrid bonds that will stay within Arkema's financial leverage objective of 2x EBITDA.
Following this transaction and all that has been achieved over the past years in both organic projects and M&A, Arkema's technological profile will now be uniquely positioned to benefit from the accelerating demand linked to megatrends. In the coming years, the Group will give its priority to organic growth, leveraging its breadth of innovative technologies in attractive markets and applications. With regard to M&A, the Group will continue to work on the deconsolidation of its Intermediates segment and will focus its acquisitions program on
bolt-on operations, particularly in adhesives.
The deal, which is subject to the approval of Chinese and Korean anti-trust authorities, should be finalized end-.
If you want to learn more, please visit our website Boraychem.
Want more information on Pi Advanced Materials? Feel free to contact us.