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Oct 28 (Reuters) – Polymer maker and supplier Synthomer (SYNTS.L) has agreed to buy U.S.-based Eastman Chemical Company’s adhesive resins business for $1 billion as it looks to scale up its business, the British company said on Thursday.
To partly fund the cash deal, Synthomer is issuing shares to raise about 200 million pounds ($275 million), the London-listed company said, adding that it would also be drawing a new $300 million debt facility.
Shares of the company rose as much as 7.3% in early trading, but gave up some gains to trade 2.8% higher at 487.2 pence by 0854 GMT.
“The business is well-invested, with six manufacturing facilities, a highly skilled and experienced workforce and has a … strong innovation pipeline which will deliver meaningful revenue growth over the next few years,” Synthomer Chief Executive Calum MacLean said in a statement.
The company expects the business to add to earnings per share on a double-digit basis from the first year, with annual pre-tax cost synergies of about $23 million by the end of the third year following the completion of the deal.
Earlier this year, Synthomer had bought another chemical firm, Omnova, in an $824 million deal.
($1 = 0.7275 pounds)
Reporting by Sinchita Mitra and Pushkala Aripaka in Bengaluru; Editing by Anil D’Silva