Rubber Journal Asia

French rubber chemical company sold to Omnova
US-based emulsions chemicals supplier Omnova Solutions will purchase rubber chemicals supplier Eliokem from its parent company AXA Private Equity for US$300 million. One of the reasons given for the purchase is for Omnova to enter the Asian market where Eliokem generates 40% of its sales and where it has facilities, in China and India.

Omnova intends to raise US$425 million of new long term debt to fund the transaction. "This acquisition will transform Omnova Solutions into a much larger, more diverse speciality chemical and functional surfaces company with significantly enhanced global capability," said Kevin McMullen, Chairman/CEO.

Eliokem's sales for the last one year and adjusted EBITDA through May 2010 were approximately US$268 million and US$50 million respectively. Eliokem is headquartered in Villejust, France, and has manufacturing sites in Caojing and Ningbo, China; Valia, India; Le Havre, France; and Ohio, US. Eliokem also has regional sales offices in the US, Singapore, China and India and employs about 630 people worldwide.

Upon completion, the Eliokem acquisition will provide Omnova with significant strategic benefits, especially in high growth market segments and applications and improved access to the fastest growing regions of the world. Asian sales for Omnova's Performance Chemicals segment, where Eliokem will be integrated, for the last one year were US$15 million. Its chemical sales in Europe for the same period were US$30 million, primarily through alliance manufacturing partners. Eliokem's manufacturing site in Le Havre, France, is well suited to enable improved growth of high margin speciality chemicals.

Both companies have strong capabilities in polymer development and manufacturing. While Omnova's primary focus has been on styrene butadiene (SB)-based latices, Eliokem's business will add additional complementary technologies and applications to Omnova's speciality chemicals portfolio.

Synergies are expected to provide savings in manufacturing, logistics and purchasing, by leveraging the resources of an integrated global team.