Element Solutions Announces Closing of Coventya Acquisition

Reading time ( words)

Element Solutions Inc., a global and diversified specialty chemicals company, announced that it has closed its previously announced acquisition of Coventya Holding SAS, a global provider of specialty chemicals for the surface finishing industry. Coventya joins MacDermid Enthone Industrial Solutions and will be reported within the Company’s Industrial & Specialty segment.

Coventya is expected to generate annual sales of approximately $190 million and adjusted EBITDA of greater than $35 million for its fiscal year 2021 ending in September. Including annualized synergies of at least $15 million expected to be achieved within two years, the purchase price represents less than 10x Coventya’s projected fiscal year 2021 adjusted EBITDA. The total consideration of approximately $500 million was funded with $400 million of additional Term Loan B debt and cash on hand. The add-on tranche of Term Loan B matures in January 2026 and has an effective interest rate of less than 2% after giving effect to cross-currency swaps into fixed-rate euro-denominated debt. 

President and Chief Executive Officer Benjamin Gliklich said, “We are excited to welcome Coventya and its talented people to the Element Solutions family. The more time we spend with the Coventya team, the more enthusiastic we have become about the potential from this combination. We believe our MacDermid Enthone Industrial Solutions business will benefit significantly from Coventya’s added scale and complementary product offerings, and so will our customers from a larger, more comprehensive set of solutions and deeper technical know-how. On an annualized basis, we expect the acquisition to be approximately 5% accretive to our adjusted EPS, based on our previously announced guidance of $1.35 or greater for 2021 before the impact of the acquisition. This accretion does not include run rate cost synergies of at least $15 million that we expect to realize within the next two years.”

Gliklich continued, “Within our end-markets, opportunities of this magnitude are rare, and we are thrilled to have executed against one consistent with our acquisition strategy of investing in markets we know and acquiring businesses we believe are better under our ownership at attractive valuations. Our strategy of balancing operational excellence with prudent capital allocation continues to deliver. Strong execution and prudent balance sheet management since the inception of Element Solutions have allowed us to fund this transaction without additional equity while being on track to maintain our net debt below 3.0x adjusted EBITDA at year end 2021.”



Suggested Items

Whiteside’s View From the Summit: An Industry Perspective

01/04/2021 | Nolan Johnson, I-Connect007
I spoke with Shane Whiteside to get his unique perspective on the industry as president and CEO of Summit Interconnect, as well as his position on the board of directors for the IPC. Whiteside discusses the business challenges he sees overall.

Punching Out! The Additive Process: Tips on How to Buy a Board Shop or Assembly House

05/10/2016 | Tom Kastner, GP Ventures
One of the quickest ways to grow a business is to acquire another business. At the same time, acquiring a business can be risky, and a really bad deal may put your original business in jeopardy. Here are some tips on how to make acquisitions.

Copyright © 2021 I-Connect007. All rights reserved.