The Swiss chemical solutions company Archroma (part of the U.S.-based investment firm SK Capital Partners) has entered into a definitive agreement to acquire the Textile Effects business from Huntsman Corporation. Huntsman Textile Effects was in the OIC news lately for its new PFC-free water repellent.
The total enterprise value of the transaction is approximately $718 million, which includes the assumption of approximately $125 million in net underfunded pension liabilities as of December 31, 2021. The acquisition is being partially funded with preferred equity, of which Huntsman is taking up to $80 million, an amount SK Capital Partners will seek to syndicate prior to the transaction closing.
Over the last twelve months ending June 30, 2022, the Textile Effects division reported sales of $772 million and adjusted Ebitda of $94 million. Huntsman anticipates cash taxes on the transaction of approximately $50 million. Huntsman intends to report Textile Effects as discontinued operations beginning in the third quarter of 2022. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the first half of 2023.
“The combination of Archroma and Textile Effects is transformational, bringing together two highly complementary organizations with strong cultures of innovation and a shared commitment to inspire advancements in the textile industry. We are excited by what we will be able to achieve together. At a time when we are seeing strong growth trends in sustainability, the merger will position us firmly to accelerate growth and drive significant value for our customers, employees, and stakeholders,” said Rohit Aggarwal, president of Huntsman Textile Effects, in the Archroma press release.
Both Archroma and Textile Effects are founding members of Sustainable Chemistry for the Textile Industry (SCTI), an alliance of chemical companies aiming for more sustainable chemistry solutions in the textile and leather industries.
Headquartered in Pratteln, Switzerland, Archroma operates in over 100 countries, with 2,800 employees in 31 countries and 25 production sites.
