DL Chemical Co., a subsidiary of DL Holdings Co., Ltd., will acquire 100% of Kraton Corporation in an all-cash transaction implying an enterprise value of approximately $2.5 billion, the latter company announced.
Under the terms of the merger agreement, Kraton stockholders will receive $46.50 in cash for each share of Kraton common stock they own.
"Following an extensive review of a wide range of strategic alternatives focused on maximizing value for the benefit of our stockholders, Kraton's Board has determined that the sale of Kraton to DL Chemical is in the best interest of Kraton stockholders," said Kevin M. Fogarty, Kraton's president and CEO. "We believe the transaction provides immediate and certain value for Kraton stockholders and represents an attractive premium of approximately 50% over Kraton's unaffected market valuation as of early July. Moreover, we believe DL Chemical has the industry presence and resources to continue to support the growth of Kraton's business on a global scale".
"Consistent with our longstanding goal of maximizing value for the benefit of our stockholders, over the years Kraton's Board and management team have actively evaluated a wide range of strategic alternatives," said Dan F. Smith, chairman of Kraton's Board of Directors. "[This] announcement marks the culmination of the strategic review process for Kraton, resulting in a transaction that we believe provides significant value for Kraton stockholders. In addition, we believe the scale and strength of the combined company will also benefit our customers and our employees, as it will expand Kraton's global reach while creating a robust platform to further support investment in the existing innovation pipeline and provide for further expansion of sustainable offerings."
The merger agreement was unanimously approved by Kraton's Board of Directors, which has recommended that Kraton stockholders vote in favor of the transaction.
The acquisition is expected to close by the end of the first half of 2022.