Kartik Kohli 2023-07-06 23:46:25
Arkema SA has agreed to acquire Glenwood Private Equity’s (Seoul) 54% stake in PI Advanced Materials Co., Ltd. (PIAM; Seoul) for €728 million. The deal, which is subject to approval from the Chinese and South Korean antitrust authorities, should be finalized at the end of 2023.
Acquiring Glenwood Private Equity’s 54% stake will allow the full consolidation of PIAM in Arkema’s accounts, the company said. The remaining 46% of PIAM’s shares will stay listed on the Korea Exchange.
With annual sales of more than €200 million and an EBITDA margin of about 30%, PIAM is the worldwide leader in polyimide films, with a more than 30% global market share, Arkema said. PIAM’s polyimide films for flexible printed circuit boards (PCBs) and graphite sheets are used in the high-margin markets of mobile devices and electric vehicles (EVs).
Arkema said that PIAM’s ultra-high-performance polyimides offer “exceptionally high” temperature resistance, dimensional stability, flexibility and electric insulation. The products are increasingly used in markets such as EVs, consumer electronics, semiconductor manufacturing and other advanced industrial applications. They benefit from the growing need for miniaturization, higher thermal management and increased safety and durability, the company said.
PIAM has two production sites and two R&D centers in South Korea.
Arkema expects PIAM’s sales to grow by about 13% per year, supported by its customer qualifications in 5G antennas and high-resolution organic light-emitting diode displays, as well as by strong growth in applications such as flexible screens.
“PIAM is the worldwide leader in polyimide films, with a more than 30% global market share.”
In the EV market, growth will be driven by high demand for tapes for battery cell insulation, flexible PCBs for battery management systems and varnishes for high-voltage motor coils, Arkema said. PIAM will also benefit from a recently finalized capital expenditure (capex) program of about €100 million that will cover most of the company’s planned midterm developments, said Arkema.
PIAM’s portfolio fits well with Arkema’s advanced materials segment, strengthening the segment’s high-performance polymer range in markets linked to megatrends, and enabling an acceleration of organic sales growth and expansion of EBITDA margins.
Arkema said that the transaction is aligned with its ambition to be a pure player in specialty materials and develop fast-growing applications supported by megatrends.
The deal offers significant pretax synergies estimated at about €30 million at the EBITDA level, which should be achieved within five years, with a limited requirement for additional capex. These synergies are driven by complementarities of the two product ranges, Arkema’s geographic reach and PIAM’s strong customer intimacy in Asia.
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