Arkema has agreed to acquire Dow's flexible packaging laminating adhesives business, one of the leading producers of adhesives for the flexible packaging market, with annual sales of approximately $250 million. The proposed acquisition will significantly expand Arkema's portfolio of flexible packaging solutions, making the group a key player in this attractive market.
Dow's flexible packaging laminating adhesives business offers a wide range of high-quality solutions for food and medical applications, as well as industrial lamination (window films, photovoltaic backsheets, etc.).
The flexible packaging market is expected to grow at a rate higher than GDP in the coming years, especially driven by the demand for more sustainable and recyclable solutions. With cutting-edge technology, well-known brands such as ADCOTE™ and MOR-FREETM, and five state-of-the-art manufacturing sites in Italy, United States and Mexico, Dow's flexible packaging laminating adhesives business is one of the leading solution providers in the packaging industry's history, with operations in North America and Europe.
Combined with Bostik's existing commercial presence in flexible packaging, product offering and technology breadth, the acquisition will enable Bostik to ideally complement its existing business and position itself as one of the key global partners for customers in the packaging industry.
In addition to benefiting from potential growth and market recovery in the coming years, Arkema aims to quickly capture new growth opportunities and achieve high-level, balanced cost and development synergies, with earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $30 million in five years' time.
The proposed acquisition is fully in line with Arkema's strategy to expand in advanced technologies and growing markets, and is another important step to support the future growth of its Adhesive Solutions division. It is based on an enterprise value of $150 million (approximately 10 times EBITDA in 2024) and will trigger approximately $50 million in implementation costs or capital expenditures over the next three years.
Thierry Le Hénaff, Chairman and CEO of Arkema, said: "We are very pleased to announce this great acquisition, which is fully in line with Arkema's strategy to offer its customers innovative products with a high technological content and to continue to grow in the attractive adhesive sector. This will enable the Group and Bostik to expand their commercial and geographical presence in the packaging sector and refine their product range in this demanding and fast-moving market, especially with regard to sustainability challenges. We welcome the Dow team into this new phase of growth. "
The acquisition is subject to approval by certain antitrust authorities and is expected to close in the fourth quarter of 2024.
