Omnova to buy Eliokem for Euro227 million

ERJ staff report (DS)

Fairlawn Ohio -- Eliokem International of France is to change hands once more. This time, Omnova Solutions is to buy the former Goodyear Chemicals operation. Axa Private Equity bought the company in 2006 for about €130 million and has now agreed to sell it to Omnova for about €227.5 million.

Closing of the proposed transaction is subject to consultation with Eliokem's Works Council in France, completion of a definitive agreement, regulatory approvals, financing and other customary conditions. Subject to these conditions, the Company anticipates completion of the transaction by the end of 2010.

According to a press release issued by Omnova, Omnova has entered into an agreement with AXA Private Equity granting the Fairlawn-based company what it called “a period of exclusivity” to acquire specialty chemicals manufacturer Eliokem.

Omnova said it intends to raise $425 million of new long-term debt to fund the transaction and the repayment of all existing Omnova and Eliokem debt.

In addition, Omnova said it plans to extend and increase the size of its unused asset-based credit facility to $100 million and expects to have $40 million in cash at the closing of the acquisition. Omnova expects the transaction to be neutral to slightly dilutive to earnings in 2011, but accretive in 2012.

“This acquisition will transform Omnova Solutions into a much larger, more diverse specialty chemical and functional surfaces company with significantly enhanced global capability,” Kevin McMullen, Omnova chairman and CEO, said in a statement. “It is an excellent fit with Omnova's strategy to grow in existing markets, penetrate new adjacent markets and globalise our company.”

Eliokem is a worldwide producer of specialty polymers and chemicals, including coating resins, elastomeric modifiers, antioxidants, rubber reinforcing resins and oil-and-gas drilling chemicals. The company's 12-month sales through May 2010 totaled $268 million.

Eliokem is headquartered in Villejust, near Paris, and has manufacturing sites in Caojing and Ningbo, China; Valia, India; Le Havre, France; and Akron, Ohio. Eliokem also has regional sales offices in Akron, Singapore, Shanghai and Mumbai. The company employs about 630.

This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.

Press release from Omnova