MIAMI – Element Solutions has closed its previously announced acquisition of Coventya Holding. Coventya joins MacDermid Enthone Industrial Solutions and will be reported within the company’s Industrial and Specialty segment.

Coventya is expected to generate annual sales of approximately $190 million and adjusted EBITDA of greater than $35 million for fiscal 2021 ending in September.

Including annualized synergies of at least $15 million expected to be achieved within two years, the purchase price represents less than 10x Coventya’s projected fiscal 2021 adjusted EBITDA. The total consideration of approximately $500 million was funded with $400 million of additional Term Loan B debt and cash on hand. The add-on tranche of Term Loan B matures in January 2026 and has an effective interest rate of less than 2% after giving effect to cross-currency swaps into fixed-rate euro-denominated debt.

“We are excited to welcome Coventya and its talented people to the Element Solutions family,” said president and CEO Benjamin Gliklich. “The more time we spend with the Coventya team, the more enthusiastic we have become about the potential from this combination. We believe our MacDermid Enthone Industrial Solutions business will benefit significantly from Coventya’s added scale and complementary product offerings, and so will our customers from a larger, more comprehensive set of solutions and deeper technical know-how. On an annualized basis, we expect the acquisition to be approximately 5% accretive to our adjusted EPS, based on our previously announced guidance of $1.35 or greater for 2021 before the impact of the acquisition. This accretion does not include run rate cost synergies of at least $15 million that we expect to realize within the next two years.

“Within our end-markets, opportunities of this magnitude are rare, and we are thrilled to have executed against one consistent with our acquisition strategy of investing in markets we know and acquiring businesses we believe are better under our ownership at attractive valuations. Our strategy of balancing operational excellence with prudent capital allocation continues to deliver. Strong execution and prudent balance sheet management since the inception of Element Solutions have allowed us to fund this transaction without additional equity, while being on track to maintain our net debt below 3x adjusted EBITDA at year-end 2021.”

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