France-based diversified chemical manufacturer Arkema has closed its previously announced acquisition of Ashland’s Performance Adhesives business for around $1.65bn in an all-cash transaction.
The company signed an agreement to acquire Ashland’s business in August last year.
Ashland’s Performance Adhesives business supplies a wide range of adhesives for flexible packaging and pressure-sensitive adhesives for various markets, including decorative labels, protection and signage films for automotives and buildings.
The business operates a network of six production plants, most of which are located in North America, and has around 330 employees.
Last year, the business generated an estimated $360m in sales and an earnings before interest, tax, depreciation and amortisation (EBITDA) margin above 25%.
The deal is in line with Arkema’s strategy to deal exclusively in speciality materials by 2024.
It is also intended to help the company’s adhesive and sealing business, Bostik, to expand its range of product offerings and strengthen its position in the high-performance industrial adhesives market.
Arkema said that following the acquisition, Bostik can aim for an EBITDA margin above 17% by 2024.
Arkema chairman and CEO Thierry Le Henaff said: “We are very happy to welcome Ashland Performance Adhesives’ teams within Arkema.
“I am convinced that Bostik will benefit from this deal to accelerate its development in attractive and high-growth applications.
“Our strengthened Adhesive Solutions segment will play a key role in implementing our ambition to be a leader in innovative materials for a more sustainable world.”
Ashland expects to receive net proceeds of around $1.2bn to $1.3bn from the divestiture.
The company will invest this capital to support its core businesses and enhance its balance sheet and reward shareholders.
Ashland chair and CEO Guillermo Novo said: “The sale of our Performance Adhesives business completes our journey as a focused additive and speciality ingredients company with leadership positions in life sciences, personal care and coatings.”