Archroma to buy Huntsman Textile Effects
As had been widely anticipated, SK Capital Partners operation Archroma has entered into a definitive agreement to acquire the Singapore-based Textile Effects business of Huntsman. Closing is expected to take place in 1H 2023, subject to customary conditions and regulatory approval. Textile Effects had sales of $772 million and adjusted EBITDA of $94 million in the last financial year.
The total enterprise value is about $718 million, including the assumption of approximately $125 million in net underfunded pension liabilities. It 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 closing.
Archroma was formed in 2013 and combines the legacy heritages of Sandoz, Hoechst, Clariant, BASF and Dohmen in textiles. It is based at Pratteln, near Basel in Switzerland. Huntsman Textile Effects also incorporates the business of the former Ciba, and makes dyes for cotton, wool, polyamide and polyester textiles.
“Finally, we have achieved a dream of combining the technologies, products and capabilities of the legacy pioneers of the textile industry into a modern and cohesive enterprise that is focused on delivering innovative and sustainable systems and solutions to serve the evolving needs of today’s textile industry,” commented Barry Siadat, co-founder of SK Capital Partners and chairman of Archroma.
Huntsman chairman, president and CEO Peter Huntsman said that the proceeds are expected “to be deployed in-line with our current balanced capital allocation programme, which includes strategic investments and acquisitions … as returning cash to shareholders through both our dividend and share repurchase programme”.