Avient to acquire DSM’s materials biz for US$1.5 bn; plans to sell distribution biz

US-based materials company Avient Corporation is to acquire the DSM Protective Materials business (including the Dyneema brand). The purchase price of US$1.48 billion is subject to certain customary adjustments. Avient has also announced that it plans to explore sale options for its Avient Distribution business.

The proposed sale of DSM's business comes after the Dutch specialty chemicals maker's announcement last year about exploring an exit for the division as it aimed at making sustainable food and health products.

Avient's potential purchase deal includes all of DSM's Protective Materials activities, mainly consisting of Dyneema, DSM said in a separate statement, adding that the unit accounted for US$362 million of the company's total annual net sales in 2021.

Avient, meanwhile, also said it plans to explore the sale of its distribution business, but did not provide additional details on the divestment.

"We are thrilled to add the Dyneema brand and its unique technologies to Avient, further expanding our growing composites portfolio," said Robert M. Patterson, Chairman, President/CEO, Avient Corporation. "For ten years, we have been building our advanced composites platform by focusing on high-performance materials for applications where failure is not an option. The addition of the Dyneema portfolio will raise Avient's material offerings to the highest levels on the performance spectrum of composites and engineered fibres."

Dyneema is an ultra-lightweight specialty fibre that is 15 times stronger than steel and is used in demanding applications such as ballistic personal protection, marine and sustainable infrastructure, renewable energy, industrial protection and outdoor sports. Estimated sales and EBITDA for the Dyneema business in 2022 are approximately US$415 million and US$130 million, respectively. The business includes six production facilities, four R&D centres and approximately 1,000 employees located around the world.

Excluding intangible amortization, the acquisition will be immediately accretive to EPS, adding approximately US$0.35 per share on a pro forma basis for 2022. Further, Avient's composites platform with the Dyneema business will represent over 50% of the company's Specialty Engineered Materials segment sales.

In conjunction with our intent to acquire Dyneema, we plan to explore a potential sale of our distribution business," said Patterson. "This would allow Avient to remain modestly levered at 2.9x adjusted EBITDA while also expanding adjusted EBITDA margins from 12% to 18%, the highest amongst our formulator peers."

The acquisition has been approved by the Boards of Directors at both Avient and DSM and is expected to close later this year, subject to the satisfaction of customary closing conditions.

(PRA)

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