Huntsman (HUN) Completes Buyout Of Icynene-Lapolla For $350M
Zacks Investment Research | Feb 23, 2020 09:06PM ET
Huntsman Corporation (NYSE:HUN) completed the acquisition of Icynene-Lapolla from an affiliate of FFL Partners, LLC. Notably, the deal was valued at $350 million in an all-cash transaction financed from available liquidity, subject to customary closing adjustments. The purchase price suggests an adjusted EBITDA multiple of 10 times or adjusted EBITDA pro forma of 7 times for synergies.
Icynene-Lapolla is a leading North American manufacturer and distributor of spray polyurethane foam (SPF) for commercial and residential use. It has annual revenues of around $230 million, with two manufacturing facilities in Houston, TX, and Mississauga, Ontario.
Per Huntsman’s management, the acquisition is in sync with its strategy of expanding its downstream polyurethanes business. The acquisition will likely boost its portfolio of leading energy-saving insulation applications and technologies, and provide customers with an unparalleled product offering. Further, the acquisition is expected to generate significant synergies.
The combination of Icynene-Lapolla with Demilec (acquired by Huntsman in 2018) is expected to create the world's leading supplier of spray foam products. It is also expected to provide highly innovative energy-saving solutions for owners of residential and commercial properties.
The acquisition is also expected to provide an impetus to the globalization of the SPF technology. Notably, the combined business is now witnessing close to $500 million in revenues. With synergies, Huntsman expects the SPF business to exceed $100 million in EBITDA by the end of 2021.
The company's shares have dipped 16.1% in the past year compared with the Zacks Investment Research
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