US Huntsman eyes bolt-on acquisitions targeting specialty, downstream businesses

Author: Adam Yanelli


HOUSTON (ICIS)--Huntsman will use its strong balance sheet to focus on building its core platforms through targeted bolt-on acquisitions, the US-based polyurethanes and epoxy-resin producer said on Friday.

Speaking during a conference call to discuss second-quarter earnings, company executives said Huntsman will “aggressively pursue M&A (merger and acquisition) opportunities”.

Huntsman CFO Philip Lister said that the company divested about one-fifth of its portfolio in the sale to Indorama in early 2020.

“Where it makes sense from a valuation perspective, this M&A strategy will continue as we intend to grow our core platforms, particularly in our specialty and downstream businesses,” Lister said.

Huntsman sold its intermediates and surfactants businesses for around $2bn to Indorama on 5 February.

The company used the financial flexibility from that sale to acquire epoxy resins and nitrile latex producer CVC Thermoset Specialties for $300m in cash in March 2020, and for its $350m acquisition of spray polyurethane foam (SPF) producer Icynene-Lapolla in February 2020.

CEO Peter Huntsman said the company will use a disciplined approach.

“We have a very strong balance sheet that affords us to aggressively pursue M&A opportunities,” Huntsman said, adding that any acquisitions will be done where the company has true synergies, growth opportunities, and the ability to stabilize earnings.

“Having said that, I have been surprised at some of the multiples that have been seen in some of the recent transactions in this industry,” he said. “As I have said before, we will be disciplined.”

Additional reporting by Joseph Chang