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To drive transformation into a supplier of specialty materials and sustainable solutions, Trinseo announced on July 19, 2021 that it has entered into an acquisition agreement with Aristech Surfaces LLC ("Aristech")
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Trinseo's latest acquisition, Aristech, is a leading North American manufacturer and global supplier of polymethyl methacrylate (PMMA) continuous casting and solid surface sheets serving the healthcare, construction, transportation and industrial markets
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Aristech products are used in a wide range of applications including hot tubs, spa pools, countertops, signage, bathroom products and recreational vehicles
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With high margins and strong cash flow conversion capabilities, Aristech is expected to create long-term shareholder value
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Aristech's business will be integrated into Trinseo's Engineered Materials business segment:
Strengthen Trinseo's strong position in PMMA solutions and drive expansion into healthcare, leisure and construction end markets in key regions including Asia
Purchase price of $445 million; implied purchase price of 7 times estimated enterprise value/2021 adjusted EBITDA, including $50 million in tax benefit (incremental tax base) and $10 million in annual operating cost synergies
●● This transaction is expected to achieve growth in business scale, profit and cash flow
●The acquisition is expected to generate annual pre-tax cost synergies of approximately $10 million through 2024
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In addition, we will create additional revenue synergies by leveraging Trinseo's presence and customer relationships in North America, Europe and Asia
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Together, the technology and commercial teams of both companies will drive business growth and create tangible value for shareholders
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Trinseo's net leverage is expected to remain in the low range of around 2.
0x through the end of the year, including estimate adjustments for the divestiture of the synthetic rubber business and the acquisition of the Aristech and Arkema PMMA businesses
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Trinseo expects to close the acquisition by the end of 2021, subject to customary closing conditions and regulatory approvals
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