TAGS: Automotive Electrical & Electronics New Energy Solutions
Arkema broadens its range of high-performance polymers with the acquisition of 54% stake in PI Advanced Materials (PIAM) for €728 mn enterprise value.
With sales of over €200 mn, an EBITDA margin of around 30% and best-in-class manufacturing, PIAM is the global player in polyimide films, delivering superior growth in the attractive consumer electronics and electric vehicles markets.
The acquisition is an opportunity to broaden Arkema’s polymer range with ultra-high performance and cutting-edge technology, strengthening the Advanced Materials segment’s portfolio and performance.
Allows Full Consolidation of PIAM in Arkema’s Accounts
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PIAM is a company with a unique technological positioning, state-of-the-art manufacturing facilities and invaluable customer relationships. This acquisition is fully aligned with our strategy to be at the forefront of high-performance materials for high growth end markets supported by megatrends such as electric vehicles and advanced electronics. After the divestment of PMMA, the acquisition of Ashland adhesives and the current start-up of our bio PA11 plant in Singapore, Arkema is delivering another significant milestone of its strategy focused on innovative materials for a sustainable world," said Thierry Le Hénaff, Arkema’s chairman and chief executive officer.
PIAM sales are expected to grow by around 13% per year in the coming years, supported by its robust innovation pipeline and successful customer qualifications in 5G antennas and high-resolution OLED displays, as well as by strong growth in applications such as flexible screens. In the electric vehicle market, growth will be driven by high demand for tapes for battery cell insulation, flexible printed circuit boards for battery management systems and varnishes for high-voltage motor coils. Besides, PIAM will benefit from the recently finalized capital expenditure program of around €100 million that will cover most of the planned
mid-term developments.
The acquisition of Glenwood Private Equity’s 54% controlling stake will allow the full consolidation of PIAM in Arkema’s accounts. The remaining 46% of the shares will continue to be listed on the Korean stock exchange.
The transaction price is based on a €728 million enterprise value for the 54% stake, representing c.20x the average 2021/2022 EBITDA. The enterprise value/EBITDA multiple will be reduced to 8x in 2027 with the benefit of PIAM’s organic growth and of the targeted synergies and will continue to decrease over the following years. The deal will be financed fully in cash, maintaining a strong balance sheet with a level of net debt including hybrid bonds that will stay within Arkema’s financial leverage objective of 2x EBITDA.
Following this transaction and all that has been achieved over the past years in both organic projects and M&A, Arkema’s technological profile will now be uniquely positioned to benefit from the accelerating demand linked to megatrends. In the coming years, the Group will give its priority to organic growth, leveraging its breadth of innovative technologies in attractive markets and applications. With regard to M&A, the Group will continue to work on the deconsolidation of its Intermediates segment and will focus its acquisitions program on bolt-on operations, particularly in adhesives.
The deal, which is subject to the approval of Chinese and Korean anti-trust authorities, should be finalized end-2023.
Source: Arkema
