Huntsman Corporation (NYSE: HUN) announced today it has entered into a definitive agreement to sell its chemical intermediates businesses, which includes PO/MTBE, and its surfactants businesses to Indorama Ventures in a transaction valued at $2.076 billion, comprising a cash purchase price of $2.0 billion plus the transfer of up to approximately $76 million in net underfunded pension and other post-employment benefit liabilities. The $2.076 billion transaction value represents an LTM adjusted EBITDA multiple of approximately 8.0 times, which includes retained SG&A costs of about $30 million, a portion of which Huntsman expects to eliminate over time. Under the terms of the agreement, Indorama Ventures would acquire Huntsman’s manufacturing facilities located in Port Neches, Texas; Dayton, Texas; Chocolate Bayou, Texas; Ankleshwar, India; and Botany, Australia. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close near year-end.
Peter Huntsman, Chairman, President and CEO commented:
“This transaction further transforms Huntsman’s balance sheet and future. It accelerates our ability to expand more in areas both downstream and complementary to our portfolio. This is another milestone in our stated strategy to focus more on our downstream and specialty businesses where we will generate more stable margins and consistent, strong free cash flow. We are committed to retaining our strong investment grade balance sheet, repurchasing our shares, investing in organic research and select capacity expansions and acquiring strategic assets that are accretive to our earnings and create shareholder value.
“For Indorama Ventures, they will be acquiring a strong EO/PO derivatives business with a very exper ienced workforce and management team. This is also a transformational opportunity for Indorama Ventures that provides them hundreds of product grades and thousands of customers. Huntsman looks forward to continuing to work with Indorama Ventures as a customer and manufacturing partner through long-term commercial arrangements, including propylene oxide supply.
“Huntsman intends to accelerate share repurchases under its existing $1 billion multi-year authorization after the close of this transaction.”
Aloke Lohia, Group CEO of Indorama Ventures, commented:
“This acquisition is a momentous propellant in our journey towards our stated goal of being a global, diversified chemicals company with multiple, and related earnings streams.”
BofA Merrill Lynch served as Huntsman’s financial advisor and Kirkland & Ellis is acting as its legal advisor.
Conference Call & Webcast Information
We will hold a conference call to discuss the agreement to sell our chemical intermediates and surfactants businesses on Thursday, Aug. 8, 2019 at 9 a.m. ET.
- Participant dial-in numbers:
Domestic callers: (877) 402-8037
International callers: (201) 378-4913
The conference call will be accompanied by presentation slides that will be accessible via the webcast link and Huntsman’s investor relations website, ir.huntsman.com. Upon conclusion of the call, the webcast replay will be accessible via Huntsman’s website.
Select Pro Forma Financial Information (Unaudited)
Supplemental unaudited select historical information reflects the continuing operations of Huntsman Corporation and treats the chemical intermediates and surfactants businesses as discontinued operation.
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