Kraton Corporation has announced that it has agreed to sell its CariflexTM business unit to Daelim Industrial Co., Ltd. for a purchase price of USD 530 million. The acquisition of Cariflex will provide Daelim with an excellent opportunity to strengthen its polymer presence globally.
The transaction is expected to close in the first quarter of 2020, subject to customary regulatory approvals and other closing conditions as set forth in the purchase and sale agreement. Cariflex contributed USD 50.5 million of pro forma Adjusted EBITDA for the fiscal year ended December 31, 2018.
Strengthening Cariflex’s Global Presence
Kraton intends that the acquisition will improve its sales and leverage profile by positioning the company in core polymer and chemical businesses for future growth.
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We are excited to have found a strong strategic home for Cariflex in Daelim, a petrochemical and engineering & construction company based in Korea. We believe that this transaction delivers significant value to Kraton shareholders," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer.
Kraton believes Cariflex is an attractive business with a robust growth profile and pro forma Adjusted EBITDA margins in excess of 30%. The company undertook the strategic review of the Cariflex business to explore the possibility of unlocking value for the benefit of their shareholders, as it felt the intrinsic value of Cariflex business was not appropriately reflected in Kraton's overall valuation.
Collaboration to Benefit Medical and High-end Markets
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Cariflex is a global leader in isoprene rubber latex and this combination will allow us to provide our customers with a wider range of innovative products while adding the ability to serve the medical and other high-end markets," said Sang Woo Kim, Vice Chairman and Chief Executive Officer of Daelim.
Daelim is delighted to welcome Cariflex employees to the team and look forward to work together for a seamless transition and integration of the business. The company aims to support the combined capabilities, talent, and resources with continued investment to expand the business globally and enhance value for their shareholders.
About Kraton
Kraton Corporation manufactures styrenic block copolymers, specialty polymers and high-value performance products primarily derived from pine wood pulping co-products. Kraton's polymers are used in a wide range of applications, including adhesives, coatings, consumer and personal care products, sealants and lubricants, and medical, packaging, automotive, paving and roofing products.
The company's pine-based specialty products are sold into adhesives and tire sector, and it produces and sells a broad range of performance chemicals into markets that include fuel additives, oilfield chemicals, coatings, roads, metalworking fluids and lubricants, inks and mining.
Source: Kraton Corporation