Eastman to Acquire Genovique Specialties
The transaction is expected to be accretive to Eastman’s full-year 2010 earnings per share. Following the completion of the transaction, Genovique Specialties, including its manufacturing operations in Chestertown, MD, Kohtla-Järve, Estonia, and its joint venture in Wuhan, China, will become part of Eastman's Performance Chemicals and Intermediates (PCI) segment.
“Eastman continues to execute its strategy to grow the company through strategic uses of cash. This acquisition aligns with Eastman’s strategic goals of investing in differentiated, sustainably advantaged products and diversifying into emerging geographies,” said Jim Rogers, president and CEO. “We look forward to delivering on the benefits this transaction creates for our customers and stockholders alike.”
Regulatory changes and shifting consumer preferences are driving rising demand for non-phthalate solutions in the approximately $9 billion worldwide plasticizer market. This growing demand for non-phthalate alternatives is expected to increase volumes of non-phthalate plasticizers at a compounded annual rate of 7% over the next five years in North America and Europe. Demand is also increasing in emerging markets for products manufactured for export to developed countries, where regulations favor the use of non-phthalate plasticizers.
Eastman is currently a supplier in North America and Europe of general purpose non-phthalate plasticizers for flexible PVC applications. With 2009 revenues of approximately $135 million, Genovique Specialties is a global producer of specialty non-phthalate plasticizers based on benzoic acid for water-based adhesives, a new product line for Eastman. Genovique’s production and distribution capabilities and customer relationships in Europe and Asia also enhance Eastman’s diversification in regions targeted for growth.
“Genovique Specialties is a strategic addition that will allow us to grow our attractive plasticizer product lines,” said Ron Lindsay, executive vice president, performance polymers and chemical intermediates. “With Genovique, we will be better able to meet our customers’ demands for non-phthalates while also expanding Eastman’s presence in a high-growth, high-margin segment of the plasticizer market.”
The acquisition is expected to be completed after receipt of required regulatory approvals and satisfaction of other customary closing conditions. It is expected to be funded with available cash. The Valence Group acted as exclusive financial advisor to Eastman on this transaction.
For more information, visit www.eastman.com.