Boston, MA 09/12/2014 (wallstreetpr) – Eastman Chemical Company (NYSE:EMN) agreed to purchase specialty chemicals maker, Taminco Corp (NYSE:TAM), in a cash transaction that also includes the assumption of debt, The New York Times Reported in an article. The deal would see Taminco changing hands among three different owners in three years. The deal is expected to close by the end of this year. The buyout agreement allows Taminco room to shop around for a better offer.
In the agreement to buy Taminco Corp (NYSE:TAM), Eastman intends to pay $1.7 billion in cash. That offer values the Taminco at $26 a share, which signals a premium of 9% on the closing price on Wednesday. Eastman will also assume Taminco’s debt, a move that will bring the total value of the buyout deal to $2.8 billion.
Majority shareholder supports the deal
Eastman already has the backing of Taminco’s majority shareholder for its buyout offer. Apollo Global Management controls 54% of Taminco, according to the latest disclosure. It agreed to vote in favor of the deal with Eastman. Apollo bought Taminco for $1.4 billion in 2011 from CVC Capital Partners. However, it took the business public last year but maintained a controlling stake in it. Taminco is best known for its specialty chemicals that are widely used for water treatment and agriculture. The company’s products are also used in the oil and gas industry.
Eastman Chemical Company (NYSE:EMN) expects its acquisition of Taminco to yield cost-savings of about $60 million, or at least 5% of revenue that Taminco realized last year. Furthermore, Eastman expects the acquisition to boost its position in food and agriculture industries, where Taminco already has an attractive footprint.
Executive comment
Commenting on the deal, Eastman’s CEO, Mark J. Costa, stated that Taminco Corp (NYSE:TAM) is a specialty chemical company that boasts consistent earnings growth. He also said the company has a leading position in attractive market segments, which is in-line with their strategy. The CEO also revealed that their focus is global growth.
Eastman Chemical Company (NYSE:EMN)’s deal to acquire Taminco is expected to close later in 2014, but Taminco will also have a 30-day opportunity to look around for any better offers.
