Trinseo: Sale of Synthetic Rubber Business to Synthos
Trinseo has entered into a definitive agreement to sell its synthetic rubber business based in Schkopau, Germany to Synthos S.A. and its affiliates (collectively Synthos) for an enterprise value of approximately USD 491 million, comprised of USD 449.4 million of cash and the assumption of approximately USD 41.6 million of pension liabilities. The expected net cash proceeds are approximately USD 400 million after transaction-related costs and taxes. The strategic deal was signed on 21 May 2021.
The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in 2022. The Business includes approximately 440 employees, mostly located in Schkopau, Germany, who are expected to join Synthos once the transaction closes. The transaction also includes the transfer of the associated Schkopau-based manufacturing and research and development facilities, as well as related intellectual property.
“In pursuing our transformation strategy toward becoming a higher margin and less cyclical specialty materials and sustainable solutions provider, we believe our best path is to focus on growth in Engineered Materials and CASE applications,” said Frank Bozich, Trinseo President and Chief Executive Officer. “Following the acquisition of Arkema’s PMMA business, the divestiture of Synthetic Rubber provides Trinseo with a stronger balance sheet and greater flexibility to pursue organic and acquisition growth opportunities.”
Bozich continued, “Synthos is well-positioned to leverage the numerous growth opportunities associated with Synthetic Rubber and its strategic commitment to the synthetic rubber industry makes it an ideal owner.”
“Our management estimates that, upon consummation of the acquisition, the Synthetic Rubber Business will approximately contribute at least 50-60 million Euro of EBITDA on an annual basis. Further, we expect annualized acquisition-related synergies of above 20 million Euro, mainly resulting from volume increases resulting from utilizing unused S-SBR and E-SBR capacity in the Synthetic Rubber Business by addressing other markets and other customer bases and the introduction of new S-SBR and Li-PBR grades with higher margins than we currently produce in our existing production plants, as well as cost savings resulting from combining our two businesses”, pointed out Zbignew Warmuz, Synthos Chief Executive Officer. “We strongly believe that this transaction will support the sustainable development of the European industry and preservation of European jobs.”
Deutsche Bank served as exclusive financial advisor and Clifford Chance served as legal advisor to Trinseo on the transaction.