One of North America’s leading manufacturers and distributors of spray polyurethane foam (SPF) insulation systems for residential and commercial applications, Demilec Inc. is set to be acquired by USA based Huntsman Corporation.
Having annual revenue of approximately $170 million and two manufacturing facilities located in Arlington, Texas and Boisbriand, Quebec, Demilec Inc. produces a full suite of MDI based SPF formulations. These products are marketed directly and also through distributors. Specializing in both closed cell and open cell formulations with a focus on products with renewable and recyclable content, Demilec produces products that are eco-friendly, bio-preferred and reduce energy consumption through highly efficient insulation properties.
Huntsman is set to pay $350 million in the all-cash transaction that is to be funded from available liquidity. The transaction is expected to close by the end of second quarter of 2018 and Based upon full year 2018 EBITDA estimates, this represents a purchase price multiple of approximately 11.5x or 7.5x, pro forma for synergies.
According to Tony Hankins, President of Huntsman’s Polyurethanes division:
“Demilec has pioneered MDI SPF insulation and coating technologies for over 30 years, building a strong market reputation with architects, builders and designers. Demilec and the entire SPF industry has delivered strong double digit growth, which we expect to be sustained as their technology provides outstanding insulation performance in a world which is increasingly concerned with improving energy efficiency. The Demilec team will continue to be fundamental to the ongoing success of the integrated business after the transaction has closed, as we rapidly build our North American platform and aggressively expand the business into international markets.”
Peter Huntsman, Chairman, President and CEO also commented the following regarding the acquisition:
“This bolt-on acquisition is a great fit to our core strategy to move downstream. The integration of Demilec into our Polyurethanes business offers significant synergies and delivers substantially higher and very stable margins by pulling through large amounts of upstream polymeric MDI into specialized spray foam systems. This integrated business will have greater than 25% EBITDA margins and double digit growth.”
Headquartered in the US and founded in 1970, Huntsman manufactures and sells organic and inorganic chemicals worldwide. Employing around 10000 employees worldwide, Huntsman’s Polyurethanes segment offers methyl diphenyl diisocyanate, propylene oxide, polyols, propylene glycol, thermoplastic polyurethane, aniline, and methyl tertiary-butyl ether for refrigeration and appliance insulation, construction products, adhesives, automotive, footwear, furniture, cushioning, specialized engineering, and fuel additives applications. Huntsman’s performance products include amines, surfactants, LAB, maleic anhydride, other performance chemicals, EG, olefins, and technology licenses for detergents, personal care products, agrochemicals, lubricant and fuel additives.
About Demilec Inc.
Founded in 1983 and headquartered in Canada, Demilec manufactures and distributes rigid and semi-rigid spray foam insulations. Demilec offers manufactures and distributes rigid and semi-rigid spray foam insulations and its product base also include HeatLok Soya that contains renewable natural oil and recycled plastic; Sealection 500, an open cell, low density, spray foam insulation; and Monokote, a spray applied thermal barrier to protect foam plastic insulation from the effects of heat and fire. Additionally Demilec also offers HEATLOK SOYA /POLARFOAM SOYA, a closed cell rigid spray foam insulation for architects, builders, homeowners, and contractors