Huntsman Corp. recently announced an agreement to acquire Icynene-Lapolla, a leading North American manufacturer and distributor of spray polyurethane foam (SPF) insulation systems for residential and commercial applications.
Huntsman is acquiring the company from an affiliate of FFL Partners, LLC.
“As the demand for energy efficiency continues to grow, both in residential and commercial construction, this combination of companies will provide Huntsman with the largest global array of spray foam technology, integration of raw materials, and associates,” said Peter Huntsman, the company’s president, chairman, and CEO.
“This is the size and type of downstream assets that we will continue to add to our company as we strengthen margins, move downstream, and be less reliant on a single product or application,” Huntsman added.
Terms of the Deal
Icynene-Lapolla has annual revenues of approximately $230 million, according to Huntsman, with two manufacturing facilities located in Houston, Texas and Mississauga, Ontario, Canada.
Under terms of the agreement, Huntsman will pay $350 million, subject to customary closing adjustments, in an all-cash transaction funded from available liquidity.
Based on full-year 2019 adjusted estimates, the purchase price represents an earnings before interest, tax, depreciation and amortization (EBITDA) multiple of roughly 10 times, or about seven times adjusted EBITDA pro forma for synergies. The deal is expected to close in the first half of 2020.
Transaction Analysis
“I am delighted that Icynene-Lapolla is joining our downstream, high-growth MDI [methylenediphenyl diisocyanate] urethanes insulation business,” said Tony Hankins, president of Huntsman’s polyurethanes division. “Icynene-Lapolla is well recognized by architects, builders, and contractors as a market leader in the manufacture and supply of high-performance, energy-efficient building envelope solutions.”
Hankins noted that nearly half of all energy consumption is used in the heating and cooling of buildings, which makes the choice of insulation critical.
“SPF is the most effective insulant available in the market,” Hankins added. “The combination of Icynene-Lapolla, with its SPF product range and reflective roof coatings, with Demilec, the SPF business we acquired in 2018, will significantly strengthen our energy-saving insulation business and provide customers with an unmatched offering of choice while accelerating the globalization of our spray foam technology.”
For more information, contact: Huntsman, (888) 564-9318, www.huntsman.com
