Another Milestone at Indorama Ventures
Indorama Ventures PCL, Thailand’s leading global chemical company, reaches another milestone in its journey of planned growth with this acquisition which squarely fits into its growth segments of Integrated EOs and the Specialty Chemicals portfolio. The assets being acquired from Huntsman represent leadership in EO and PO derivatives, achieving additional revenue of $2.0 billion and an EBITDA margin of 18% in 2018.
With this strategic acquisition IVL has a balanced portfolio of scale businesses, co-related and integrated, in global niche markets of defensive industries serving consumers daily needs and growing at ~5%. IVL is a true market leader holding #1 or #2 position in vast majority of its portfolio serving targeted sectors in select geographies.
The transaction will be funded by internal cash flows and debt financing and does not necessitate equity dilution. The nature of IVL’s business model enables it to achieve visible, diversified and steady cash flows making it a unique world-class chemical company. This acquisition further enhances this uniqueness.
The transaction is expected to be completed by 4Q 2019, subject to regulatory approvals.
Realizing the Vision
Commenting on the acquisition, Mr. Aloke Lohia, Group CEO of Indorama Ventures, said, “This acquisition is a momentous propellant in our journey towards our stated goal of being a global, diversified chemicals company with multiple, and related earning streams. I am excited by this defining acquisition since it encompasses and has a straight fit to all the values and strategic intent that we have incorporated in the IVL model; serving high growth markets, resilient and defensive industry, integrated assets serving the value chain downstream, competent and passionate management, and proprietary technology and Intellectual property. The combination of our two integrated EO assets, primarily used in captive production of EO & PO derivatives, will boost our earning streams with higher margin applications in daily necessities and strengthen our position with existing and new customers. We are thrilled to welcome our new colleagues and their added competencies which empowers our collective potential to grow continually. I am confident that this important business will drive value for all our stakeholders and underpin IVL’s earnings growth opportunities for years to come.”
Peter Huntsman, Chairman, President and CEO commented:
“For Indorama Ventures, they will be acquiring a strong EO/PO derivatives business with a very experienced workforce and management team. This is also a transformational opportunity for Indorama Ventures that provides them hundreds of product grades and thousands of customers. Huntsman looks forward to continuing to work with Indorama Ventures as a customer and manufacturing partner through long-term commercial arrangements, including propylene oxide supply.
“Our Company looks forward to further developing a long-term relationship with IVL. I not only value this relationship, but the personal trust and friendship I have developed with Mr. Aloke Lohia.”
The Valence Group acted as exclusive financial adviser to Indorama Ventures. Legal advice was provided by Lowenstein Sandler LLP and KPMG provided financial due diligence support.
* In line with Indorama Venture’s reporting policies