Synthomer completes divestment of latex compounding operations

London – Synthomer plc has completed the previously announced divestment of its latex compounding operations to Belgian chemicals company Matco NV.

The value of the transaction was €27.5 million, equivalent to an EV/standalone trailing earning (EBITDA) multiple of six times, announced London-based Synthomer 1 May.

The divestment, Synthomer went on to say, is expected to result in "a modest profit on disposal," with the proceeds to be used to reduce group net debt.

Headquartered in Waregem, Belgium, Matco specialises in compounds, water-based adhesives, and solutions for various industrial applications.

As previously announced by Synthomer, the divested business was part of the group's ‘health & protection and performance materials division’ and was designated as "non-core" to the group in October 2022.

The unit produces certain latex-based compounds and curing additives used in the manufacture of products for a range of end-markets including flooring and artificial grass.

The business comprises two manufacturing sites: one in The Netherlands, the other in Egypt, according to Synthomer.

Last year, the business generated stand-alone adjusted earnings (EBITDA) of €4.8 million and had gross assets at the end of the period of €56 million.

The divestment is consistent with group strategy to increase “the speciality weighting of the group” and reduce complexity of its site portfolio, said Synthomer CEO Michael Willome 15 April.

The UK group also aims to enhance its focus on “higher value and higher growth markets” where it has “strong and sustainable leadership positions.” Willome added.