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Huntsman acquires Demilec

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Hydrocarbon Engineering,

Huntsman Corp. has completed the purchase of Demilec, a leading manufacturer and distributor of spray polyurethane foam (SPF) insulation systems. Huntsman acquired the business from an affiliate of Sun Capital Partners Inc., for US$350 million, subject to customary working capital adjustments, in an all-cash transaction which was funded from available liquidity.

The acquisition is aligned with Huntsman’s strategy to grow its downstream polyurethanes business and leverage its global platform to expand Demilec’s portfolio of SPF formulations into international markets. The acquisition will generate substantial synergies as a result of Huntsman’s ability to pull through significant volumes of lower margin upstream polymeric MDI into the higher margin and growing specialised SPF systems.

Demilec has annual revenues of approximately US$170 million and two manufacturing facilities located in Arlington, Texas, US, and Boisbriand, Quebec, Canada, where it produces a full suite of MDI based SPF formulations, which it markets directly to applicators as well as through distributors. Demilec specialises 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.

Peter Huntsman, Chairman, President and CEO, commented: “This is a great fit for our downstream growth strategy. We are excited to have Demilec become part of our growing Polyurethanes business. We expect to integrate the business fully by the end of this year when we expect to enjoy integrated SPF EBITDA margins greater than 25%.”

Tony Hankins, President of Huntsman's Polyurethanes division, added: "Our approach to integration will ensure that the Demilec team remains focused on meeting the needs of their customers while benefiting from access to Huntsman’s raw material supply, innovation capabilities and established global network.”

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