Demilec, an Arlington-based manufacturer and distributor of spray polyurethane foam (SPF) insulation systems for residential and commercial applications, has been acquired by Huntsman Corp. for $350 million in an all-cash transaction.
Woodlands-based Huntsman acquired Demilec from an affiliate of Sun Capital Partners Inc.
According to a news release from Huntsman, Demilec has annual revenues of approximately $170 million and two manufacturing facilities located in Arlington and Boisbriand, Quebec where they produce a full suite of MDI based SPF formulations which they market directly to applicators as well as through distributors. Demilec specializes in both closed cell and open cell formulations, with a focus on products with renewable and recyclable content that are eco-friendly, bio-preferred and reduce energy consumption through highly efficient insulation properties.
Under terms of the agreement, Huntsman will pay $350 million in an all-cash transaction, funded from available liquidity. Based upon full year 2018 EBITDA estimates, this represents a purchase price multiple of approximately 11.5x or 7.5x, pro forma for synergies. The transaction is expected to close by the end of second quarter 2018.
“Demilec has pioneered MDI SPF insulation and coating technologies for over 30 years, building a strong market reputation with architects, builders and designers,” said Tony Hankins, president of Huntsman’s Polyurethanes division “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.”
Huntsman Corporation is a publicly traded global manufacturer and marketer of differentiated and specialty chemicals with 2017 revenues of approximately $8 billion.