LONDON, UK: Synthomer plc has agreed to the sale of its laminates, films and coated fabrics businesses to Surteco North America for a total enterprise value of approximately US$255 million (£208 million).

Transaction highlights

• The net proceeds arising from the Proposed Transaction are expected to be approximately US$245 million (£199 million).
• The consideration implies an EV/EBITDA multiple of approximately 8 times based on the EBITDA for the 12-month period ended 31 December 2021, which compares favourably with the post-synergy acquisition multiple of approximately 7 times achieved in connection with the OMNOVA acquisition in April 2020
• The Net Proceeds will be used to repay certain indebtedness in order to strengthen the Group’s balance sheet and support a reduction in leverage towards the Company’s target range of 1 to 2 times Net Debt to EBITDA over the medium term
• The Proposed Transaction is in line with Synthomer’s strategy as set out at the Capital Markets Day in October to increase the specialty weighting of its portfolio through the sale of identified non-core assets

The proposed transaction constitutes a Class 1 transaction for the purposes of the Listing Rules, and therefore requires the approval of Synthomer’s shareholders. A circular containing further details of the Proposed Transaction and a notice convening a general meeting of Synthomer will be sent to Synthomer’s shareholders in due course

Assuming satisfaction or waiver of all conditions to the Proposed Transaction, Completion is expected to occur in Q1 2023

Michael Willome, CEO, Synthomer plc, said: “This divestment is consistent with our recently announced strategy to increase the specialty weighting of our portfolio and focus on higher value, higher growth markets where we have strong and sustainable leadership positions. The proceeds represent excellent value for our shareholders and the transaction is a significant step in the deleveraging of the Group. I would like to thank those colleagues leaving Synthomer and wish them well for the future.”