M&As: Stepan acquires polyol business from Invista; DuPont completes IFF, Nutrition & Biosciences merger

US firm Stepan Company has purchased Invista's aromatic polyester polyol business and associated assets. Included in the transaction are two manufacturing sites, one in Wilmington, NC (US) and the other in Vlissingen (the Netherlands), and intellectual property, customer relationships, inventory and working capital. The business acquired has global sales of approximately US$100 million.

This acquisition was financed with cash on hand and is expected to be accretive to Stepan's EBITDA margins. Terms were not disclosed.

"We are excited to add Invista's polyester polyol capabilities to Stepan. This acquisition expands our manufacturing capability in both the United States and Europe, enhances our business continuity capabilities for the market and supports the growth of our global rigid polyol business. We expect that Invista's available spare capacity, plus debottlenecking opportunities in both plants, will allow Stepan to support market growth in a capital efficient way," said F. Quinn Stepan, Jr. Chairman and CEO of Stepan.

"We believe the long-term prospects for rigid polyol use in insulation remain strong as energy conservation efforts and more stringent building codes should continue to drive market growth. Additionally, we believe the acquired technology will accelerate our product leadership initiatives, drive manufacturing efficiencies and output, and create increased value for the overall market. We look forward to providing the highest level of service to our new customers and are excited to add the new employees and the two new sites to our global polyester polyol manufacturing network.

Stepan Company is a major manufacturer of specialty and intermediate chemicals used in a broad range of industries. The company is also a leading supplier of polyurethane polyols used in the expanding thermal insulation market, and CASE (Coatings, Adhesives, Sealants, and Elastomers) industries.

In other news, US-headquartered materials company DuPont has completed the merger of IFF and Nutrition & Biosciences. In connection with the closing of the transaction with IFF, DuPont receives a special cash payment estimated of US$7.3 billion, approximately US$5 billion of which will be used to strengthen the balance sheet by retiring outstanding debt.

Effective February 1, DuPont will have three business reporting segments, namely, Electronics & Industrial, Mobility & Materials, and Water & Protection.

DuPont has also concluded the strategic review of its non-core businesses. In connection with this move, the company has entered into a definitive agreement with an international private equity consortium to sell the DuPont Clean Technologies business for US$510 million.

The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions and regulatory approvals. Additionally, DuPont has concluded that it is in the best position to drive value for Tedlar, Microcircuit Materials and the DuPont Teijin Films JV, and has realigned these businesses to Mobility & Materials.

With the announced agreements relating to Biomaterials and Clean Technologies, effective February 1, 2021, DuPont will dissolve its non-core reporting segment.

(PRA)

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