Synthomer plc (LSE:SYNT) entered into a definitive agreement to acquire Adhesive Resins business of Eastman Chemical Company (NYSE:EMN) for $1 billion on October 28, 2021. Consideration will be paid in cash. The final purchase price is subject to working capital and other adjustments at closing. Financing of the acquisition and related fees and expenses from the gross proceeds of an Equity Placing expected to raise approximately $275 million, $425 million funded through existing cash resources and drawing under a new $300 million debt facility. Synthomer is required to pay Eastman the sum of $27.65 million if the Purchase Agreement is terminated by (1) Eastman where, prior to the General Meeting, the Synthomer Board has changed its recommendation to vote in favor of the acquisition; or (2) by Eastman or the company where the Resolutions referred to in (iii) above have not been passed. Acquisition represents an enterprise value multiple for Adhesive Technologies of 10.3x Adhesive Technologies' June 2021 LTM Adjusted EBITDA before synergies.

Adhesive Resins business reported EBITDA of $97.3 million and revenue $595.7 million for June 2021 LTM. The acquisition will also be conditional on various regulatory approvals, including the consultation of certain employee representatives in the relevant jurisdictions and customary closing conditions. Acquisition is conditional the approval of the Synthomer shareholders at the General meeting. As of December 17, 2021, Synthomer shareholders voted in the favor of the acquisition and approved the amendment to Article 93 of the Articles of Association to raise the borrowing restriction to £2 billion ($2.8 billion). As of November 30, 2021, circular relating to the acquisition has been approved by the Financial Conduct Authority and has been published. Assuming satisfaction or waiver of all conditions to the acquisition, completion expected to occur in the first quarter of 2022. As of March 3, 2022, the transaction is expected to complete in March 2022. The transaction is expected to deliver double digit EPS accretion from the first year.

J.P. Morgan Securities LLC acted as the exclusive financial advisor, and William B. Rowland and Dotun O. Obadina of Jones Day acted as the legal advisor to Eastman Chemical Company. Barclays Bank PLC acted as the financial advisor for Synthomer. LegalTree and BEN WARD of Herbert Smith Freehills LLP acted as the legal advisors to Synthomer plc. Jonathon Whittlesey of Squire Patton Boggs (UK) LLP acted as the legal advisor to Synthomer plc.