en.Wedoany.com Reported - U.S.-based Solstice Advanced Materials plans to acquire electronic chemicals producer Element Solutions for $14.5 billion in a transaction combining stock, debt, and cash, the two companies announced on Monday.
The market reacted swiftly, with shares of both companies falling in early trading. Solstice dropped over 14%, while Element shares declined more than 2% to $42.58, significantly below the implied $50.10 per share in the deal. The acquisition is expected to close in the first half of 2027.
Solstice CEO David Sewell stated that the deal will help the company expand its transformative growth in the electronics sector, building on its existing business strengths. Both parties believe the acquisition will create a comprehensive electronic materials company covering the entire semiconductor manufacturing, packaging, and assembly process.
If completed, the combined company is projected to have net sales of $6.8 billion in 2025, with an adjusted EBITDA margin of 26%. This margin already accounts for run-rate synergies, which are expected to exceed $180 million by the third year after closing.
At closing, net leverage is expected to be 3.5 times, with a plan to reduce it below 3 times adjusted EBITDA within 18 months. The long-term target is to maintain net leverage between 2.0 and 3.0 times adjusted EBITDA to sustain a strong sub-investment-grade rating.
To fund the $14.5 billion transaction, Solstice plans to finance it through new debt, its own cash, and issuing Solstice stock to Element shareholders. Element shareholders will receive $10 in cash and 0.50 shares of Solstice stock per share. Solstice has secured a $4.7 billion initial bridge loan commitment from Goldman Sachs, which it intends to replace with permanent debt financing.
Element Solutions traces its history back to MacDermid Inc. In 2013, MacDermid was acquired by Platform Specialty Products, which renamed itself Element Solutions in 2019 after selling its agricultural chemicals business. Solstice, meanwhile, was spun off from Honeywell less than a year ago.
