The hottest Omnova announced the completion of the

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Omnova announced the completion of the acquisition of Eliokem

omnovasolutions announced on December 10 that it had completed the acquisition of eliokeminternational, a specialty chemical producer under axaprivateequity ("Eliokem"). With working capital and capital expenditure adjustments allowed, Omnova paid 227.5 million euros (approximately US $302 million at the current exchange rate) for the acquisition of Eliokem (including its net debt). The company expects that this transaction will not affect or slightly dilute the surplus in 2011, but will increase the surplus in 2012

during the acquisition, the company issued US $250million of senior bonds maturing in 2018, replaced its existing US $150million term loan with a new US $200million term loan, and adjusted and extended its existing revolving credit agreement

kevinmcmullen, chairman and CEO of omnivasolutions, said, "this acquisition will greatly enhance performancechemicals And make it more diversified to provide services to global customers. At the same time, the acquisition also enables the company to expand our portfolio of value-added technology solutions and significantly expand our global production business while entering new high growth markets, thereby helping Omnova achieve three strategic goals. In addition, through the use of integrated global team resources, the consolidation effect is expected to help achieve savings in production, logistics, procurement, and sales, general and administrative expenses. "

mcmullen said, "based on the sales for the 12 months ended August, omnovasolutions, including our decorative product functional surface materials department, will achieve sales of $1.1 billion, of which more than 40% will come from outside the United States."

although 75% of Eliokem's sales come from the product market that Omnova has not been involved in before, the business models of the two enterprises are very similar, including production process, main raw materials and listing scheme. This acquisition focuses on the same basic lotion polymerization process, bringing many new acrylic acid, styrene butadiene and nitrile chemicals and applications to Omnova, including resin for coating, elastomer modifier, antioxidant, special rubber and reinforced resin, as well as complementary products for oil field and special emulsion applications

omnivasolutions' high-performance chemicals division mainly produces styrene butadiene, acrylic acid and other latex, as well as special coating chemicals for high-end paper and packaging, carpets, durable non-woven consumer goods, tape and separation coatings, floor wax, construction, oil fields, textile finishing, digital printing, graphic design and other professional applications

these two chemical departments achieved stable growth in 2010. In the 12 months ended August, their consolidated sales and adjusted EBITDA were about $788 million and $122 million respectively

in addition to Omnova's five North American chemical plants that provide products and services to the global market, this acquisition adds global production business to the company's high growth developing markets in Europe and Asia, namely a plant in Le Havre, France, two plants in Ningbo and Caojing, China, and a plant in Valia, India. In addition, Eliokem plant in Akron, Ohio will also bring new important processing capacity to Omnova

omnova and Eliokem both have strong polymer development capabilities and excellent teams composed of scientific personnel and technical service experts. The combination of the two will help accelerate the development of a broader range of solutions for new and old customers. The merged company will have R & D capabilities in three continents

Jimhohman, President of Omnova high performance chemicals, said, "we will continue to set the headquarters of the high performance chemicals department in felraun, Ohio, and the global manufacturing and product line management department in (1) North America, (2) Europe, India and the Middle East, and (3) Asia. This distribution structure will ensure the implementation of our alliance business strategy committed to providing value-added solutions to global customers and achieving profitable sales growth. "

non GAAP (generally accepted accounting standards) financial indicators - EBITDA and adjusted EBITDA contained in this draft are non GAAP financial indicators specified by the securities and Exchange Commission

omnova's EBITDA is calculated based on the surplus (loss) from the going concern department less interest expenses, amortization of deferred financing costs, income tax, and depreciation and amortization expenses. Omnova's adjusted plastic extruder market capacity will be further expanded. After that, EBITDA is calculated according to Omnova's EBITDA minus restructuring and severance expenses, asset impairment, non cash stock compensation and other items. Segment EBITDA is calculated based on segment operating surplus (loss) less interest expense, deferred financing cost amortization, income tax, and depreciation and amortization expenses. Department adjusted EBITDA is calculated based on department EBITDA less restructuring and severance expenses, asset impairment, non cash stock compensation and other items

Eliokem's EBITDA is calculated based on the net surplus minus interest expenses, amortization of deferred financing costs, income tax and depreciation and amortization expenses. Eliokem's adjusted EBITDA is calculated based on Eliokem's EBITDA minus restructuring and severance expenses, asset impairment and other items

ebitda and adjusted EBITDA are non GAAP financial indicators. Different enterprises have different algorithms for these two indicators. Accordingly, these two indicators may not be comparable with indicators with similar names of other enterprises, and may not be suitable for comparison with the performance of other enterprises. EBITDA and adjusted EBITDA should not be regarded as the operating performance or liquidity indicators of the company, nor should they be regarded as independent of net earnings (losses), operating cash flow or cash flow data, or as substitutes for the above three compiled in accordance with GAAP. EBITDA and adjusted EBITDA should not represent or be regarded as more meaningful than the operational performance indicators compiled in accordance with GAAP, or constitute their substitute data. Management believes that it is useful for investors to inform this information, because these indicators are often used as analytical indicators to evaluate performance or allocate resources by management. The following is the reconciliation data between these non GAAP indicators and the most comparable GAAP financial indicators. Non GAAP financial indicators

(last 12 months: 12 months ended August 31, 2010) (unit: US $million)

consolidated performance of omniva solutions for the 12 months ended August 31, 2010 and September 30, 2010 Eliokem international


Surplus (loss) from continuing operations $37.5 net surplus $4.3

interest expense 6.9 interest expense 16.5

deferred financing cost amortization 0.6 deferred financing cost amortization -

income tax 2.8 income tax 4.6

depreciation and amortization 21.4 depreciation and amortization 13.2


EBITDA $69.2 EBITDA $38.6

restructuring and severance expenses 0.6 restructuring and severance expenses 1.5

asset impairment 6.6 other 10.9

non cash stock compensation 3.5 -

other (2.2) adjusted EBITDA $51.0

---- Shaanxi ======

adjusted EBITDA $77.7

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