Synthomer USA LLC entered into a definitive agreement to acquire OMNOVA Solutions Inc. (NYSE:OMN) for approximately $460 million on July 3, 2019. Synthomer USA will acquire all of the outstanding common shares of OMNOVA Solutions for $10.15 per share in an all-cash transaction. Pursuant to the agreement, each unvested restricted share, restricted share unit, and performance share of OMNOVA Solutions that is outstanding immediately prior to the effective time, will be canceled and converted into the right to receive an amount in cash equal to the offer price of $10.15 per share. Each company performance share will be considered to have vested at target achievement levels. Synthomer plc (LSE:SYNT), parent of Synthomer USA LLC, intends to finance the acquisition and related fees and expenses from the gross proceeds of a rights issue of up to £204 million (approximately $256.4 million) (rights issue); and £1.085 billion ($1.37 billion) drawings under new bridge and syndicated debt facilities: comprising 520 million ($586.6 million) bridge facility, $260 million term loan facility and 460 million ($518.9 million) revolving credit facility. Upon completion, Synthomer will, indirectly, hold all equity interests in OMNOVA. OMNOVA Solutions and Synthomer plc will pay each other a cash termination fee equal to $15.8 million in case of termination of transaction.
Completion of the transaction is subject to the satisfaction of certain customary closing conditions, including the receipt of antitrust and other regulatory approvals in the United States, Turkey and the European Union and certain other jurisdictions and approval from Synthomer plc's and OMNOVA's shareholders. The transaction is not contingent on obtaining financing. The transaction has been approved unanimously by the Boards of Directors of OMNOVA and Synthomer. As of July 31, 2019, the transaction was approved by the shareholders of Synthomer plc. Morgan Stanley & Co. LLC has delivered to the Board of OMNOVA Solutions its written opinion, dated July 3, 2019, that, as of such date, the merger consideration to be received by the shareholders of OMNOVA Solutions pursuant to the agreement is fair from a financial point of view to the shareholders. As of August 6, 2019, Federal Trade Commission has provided early termination of the waiting period under the Hart-Scott-Rodino for the transaction. As of October 10, 2019, the shareholders of OMNOVA approved the transaction during its special shareholder meeting. As of November 18, 2019, The European antitrust regulator should publish its decision on the transaction by December 20, 2019. The European antitrust regulator has extended the provisional deadline for its decision to January 15, 2020. Transaction is subject to regulatory approval from Turkey. As of January 15, 2020, the transaction was conditionally approved by European Commission, subject to Synthomers divestiture of its small Germany-based vinyl pyridine latex business. The remaining regulatory approval for the acquisition from Turkey is expected in early February 2020. As of March 26, 2020, the transaction has been approved by European Commission and no other regulatory approvals are outstanding for the completion of the transaction. The transaction is expected to close in late 2019. As of December 17, 2019, the transaction is expected close in early 2020. As of March 5, 2020, the transaction is expected to complete in March 2020. As of March 26, 2020, the acquisition is expected to complete by April 1, 2020. The acquisition is expected to be earnings accretive in the first full financial year following completion and strongly accretive thereafter.
Morgan Stanley & Co. LLC acted as financial advisor and fairness opinion provider to OMNOVA Solutions and James P. Dougherty of Jones Day acted as its legal advisor. Neal West, Nishant Amin and Robert Mayhew of Barclays Bank PLC and Kirk McIntosh and Ian George of The Valence Group acted as financial advisors to Synthomer. Mark I. Greene, Stephen L. Gordon, Christopher K. Fargo, Craig F. Arcella, Stephen M. Kessing, Margaret Segall DAmico, Jesse M. Weiss, David J. Kappos, Anthony N. Magistrale, Eric W. Hilfers, David J. Perkins, Joyce Law, Brian M. Budnick, Matthew Morreale, Annmarie M. Terraciano and G.J. Ligelis Jr. of Cravath, Swaine & Moore LLP and Ben Ward, Mike Flockhart, Will Nevin, Kyriakos Fountoukak.os, Ilze Vigo and Peter Rowland of Herbert Smith Freehills acted as legal advisors for Synthomer plc. HSBC acted as financial adviser to Synthomer plc. Citi Corporate and Investment Bank acted as a financial advisor to Synthomer. Morgan Stanley received a fee of approximately $13.6 million, $2.5 million of which was payable in connection with the delivery of the fairness opinion and the remainder of which is contingent upon consummation of the merger. MacKenzie Partners, Inc. acted as information agent to OMNOVA and will be paid fee of $25,000. Lee Hochbaum of Jones Day acted as legal advisor to Morgan Stanley & Co. LLC.
Synthomer USA LLC completed the acquisition of OMNOVA Solutions Inc. (NYSE:OMN) on April 1, 2020.