Huntsman Corporation reached an agreement to acquire Gabriel Performance Products, a North American specialty chemical manufacturer of specialty additives and epoxy curing agents for the coatings, adhesives, sealants and composite end-markets, from funds owned by Audax Private Equity.
Under terms of the agreement, Huntsman will pay $250 million, subject to customary closing adjustments, in an all-cash transaction funded from available liquidity.
Gabriel had 2019 revenues of approximately $106 million with three manufacturing facilities located in Ashtabula, Ohio, Harrison City, Pennsylvania and Rock Hill, South Carolina. Based on calendar year 2019, the purchase price represents an adjusted EBITDA multiple of approximately 11 times, or approximately 8 times pro forma for synergies.
The transaction is expected to close in the first quarter of 2021 after regulatory approvals.
"The acquisition of Gabriel Performance Products broadens the offering in our specialty portfolio and is complementary to our recent acquisition of CVC Thermoset Specialties. Gabriel makes highly specialized toughening and curing agents and other additives used in a wide range of composite, adhesive and coatings applications," said Scott Wright, president of Huntsman's Advanced Materials division. "We expect that the Gabriel business will strengthen our North America footprint and provide significant commercial synergies as we expand and globalize their specialty products across our global footprint and customer base. The acquisition will further enhance our competitiveness and our world class formulations business by improving our ability to create differentiation in our customers' applications."
"With this acquisition we conclude a series of strategic initiatives in our Advanced Materials division we started in 2019 before the COVID-19 pandemic," said Peter Huntsman, chairman, President and CEO. "Our initial intent was to complete the acquisitions of Gabriel and CVC simultaneously, together with the divestiture of our India DIY business earlier this year.
"Despite the challenges created by COVID-19, I am pleased that we have already closed on two of the transactions and intend to close on the acquisition of Gabriel within the first quarter of 2021," he added. "We have significantly strengthened our Advanced Material's portfolio and broadened our offerings to the market. Based on 2019 results, when netting the three transactions together, we are adding approximately $57 million of adjusted EBITDA pro forma for synergies to our Advanced Materials division, for less than 5 times EBITDA."
