Huntsman Corporation said it 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 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 times, which includes retained SG&A costs of about $30 million, a portion of which Huntsman expects to eliminate overtime. 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.
“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," said Peter Huntsman, Chairman, president and CEO. "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.
“Indorama Ventures will be acquiring a strong EO/PO derivatives business with a very experienced workforce and management team."
“Huntsman intends to accelerate share repurchases under its existing $1 billion multi-year authorisation after the close of this transaction.”
