Kraton Polymers LLC completed the acquisition of Arizona Chemical Holdings Corporation (Arizona) for US$1,370 million. Arizona is the largest global provider of pine-based specialty chemicals.
“Today we are pleased to announce that we have completed the acquisition of Arizona Chemical Holdings Corporation. Through the combination of Kraton and Arizona Chemical, we create a global leader in specialty materials technology, manufacturing, and geographical presence, providing value-added products and innovations serving a diversified range of end markets through a broad portfolio of highly-engineered polymers and specialty chemicals. The scale, complementary market positions, attractive margin profile and expected strong free cash flow generation capability of the combined company will serve as a strong foundation for future growth,” said Kevin M. Fogarty, Kraton’s President and Chief Executive Officer.
“We now turn our focus to the implementation of our integration plan and the anticipated realization of US$65 million of identified transaction synergies. To help ensure a seamless transition, both Kees Verhaar, Arizona’s former President and Chief Executive Officer, and Frederic Jung, Arizona’s former Vice President and Chief Financial Officer have agreed to serve in an advisory capacity to Kraton after closing.” Fogarty said.
“With the closing of the Arizona Chemical acquisition, the third leg of our three-part strategy, which is principally designed to reinvigorate organic growth, reset our cost structure, and capture accretive M&A opportunities, has been realized. Implementation progress for initiatives relating to reinvigoration of organic growth and the reset of our cost structure continues to advance consistent with our expectations, and 2016 represents an important transition year as we expect to recognize additional strategic milestones that include the startup of our state-of-the-art HSBC capacity expansion in Mailiao, Taiwan,” Fogarty added.
“Since announcing the Arizona acquisition in late September 2015, we have become even more optimistic about business synergies we believe will allow us to create new opportunities to deepen our customer relationships and expand our presence in core markets that we share with Arizona, such as adhesives, roads and construction, coatings and oilfield chemicals, while providing non-competing and highly complementary products and technologies. Moreover, given the renewable nature of Arizona’s product and technology offerings, this complimentary growth can be accomplished while reducing our overall exposure to hydrocarbon-based feedstocks,” said Fogarty.