Omnova to be acquired by Synthomer for US$824 mn; airs optimism amid market uncertainty

Omnova Solutions, a US-based global manufacturer of emulsion polymers, specialty chemicals, and functional and decorative surfaces has entered into a definitive agreement to be acquired by UK-based specialty chemical company Synthomer for US$10.15/share in cash, or cash enterprise of US$824 million. Completion of the transaction is subject to the satisfaction of certain customary closing conditions, including the receipt of regulatory approvals, and approval from Synthomer’s and Omnova’s shareholders.  The transaction is expected to close in late 2019 or early 2020.

Meanwhile, Omnova also reported its second quarter fiscal 2019 earnings. CEO Anne Noonan said that the company’s specialisation strategy made continued progress amid market uncertainty. “ As anticipated, we continued to face challenging economic conditions and volatile markets during the quarter, “ Noonan said.  The company also reported its 10^th consecutive quarter of year-over-year with volume growth in Specialty Solutions driven by Specialty Coatings, Adhesives & Sealants and Oil & Gas.  “Our Portuguese acquisition continued to perform ahead of expectations.  In Performance Materials, our coated fabrics business doubled its contribution to profitability as it shipped new, higher-margin products, “said Noonan.

Omnova has completed the closure and sale of its Green Bay, Wisconsin plant in May and are on track to deliver US$7-8 million of annual savings beginning in June.  During the second quarter, it reported increasing production capability in Mogadore and Akron, Ohio, and improving its supply record levels of orders in Oil & Gas. Omnova Portugal, formerly Resiquímica SA, Portuguese resins and binders producer acquired by the company in 2018, is expected to continue to exceed integration and synergy targets, and to benefit from its new product development pipeline as margins for these innovative new products are “400 basis points favourable to last year”, Omnova said.

(PRA)

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