(Reuters) – Polymer maker Synthomer Plc stated on Wednesday it has agreed to buy Omnova Solutions Inc for an enterprise worth of $824 million in a bid to strengthen its international place.
London-based Synthomer is providing Beachwood, Ohio-headquartered Omnova $10.15 for every share, a premium of 58% to Omnova’s closing worth on Tuesday.
Shares of Synthomer fell 5% to 352.four pence, making them the highest loser on the FTSE 250 index. Omnova shares surged 55 % on the New York Stock Exchange to commerce at $9.96.
Acquiring Omnova will assist Synthomer bolster its footprint in Europe and Asia and penetrate into China, Synthomer stated in a press release.
The deal might be financed by way of a rights challenge of up to $257 million and is probably going to be accomplished by late 2019 or early 2020.
Five years in the past, Omnova confronted strain from activist investor Barington Capital Group. In 2015, the corporate agreed to add two of the New York-based hedge fund’s representatives to its board: Barington Capital founder James Mitarotonda and specialty chemical compounds business government Joseph Gingo. A yr later Omnova named Anne Noonan as chief government officer to exchange Kevin McMullen however the firm, a subscale enterprise in a quick consolidating business, nonetheless struggled.
Upon completion of the deal, Synthomer expects it is going to add to its earnings in the primary monetary yr and tasks an annual pre-tax value financial savings of $29.6 million by the top of the third yr.
Separately, Omnova stated its second-quarter revenue fell over 33% to $5.6 million, harm by risky markets and difficult financial circumstances.
Reporting by Ismail Shakil and Tanvi Mehta in Bengaluru and Svea Herbst-Bayliss in Boston; Editing by Arun Koyyur and David Gregorio