Dive Brief:
- Solstice Advanced Materials entered an agreement on Monday to acquire specialty chemicals maker Element Solutions for about $14.5 billion in cash and stock.
- The deal will combine Element’s electronics-focused specialty materials offerings, formulation and technical service capabilities and technology portfolio with Solstice’s chemistry, development and refrigerant products, according to a press release.
- The combined company would also have had estimated full-year 2025 net sales of approximately $6.8 billion and an adjusted EBITDA margin at 26%. Cost savings of over $180 million are expected by the third year after closing, which is expected to occur in the first half of 2027.
Dive Insight:
Under the agreement, Element’s shareholders will receive $10 in cash plus 0.5 shares of Solstice stock for each of the specialty chemicals company’s shares.
Once the transaction closes, Element shareholders will own about 44% of the combined company, which will operate as Solstice, according to the press release.
David Sewell, Solstice’s president and CEO, will head the combined company, but the chemical maker hasn’t announced a new reporting segment or integration plans at the current stage, a spokesperson for the company said in an email.
Solstice’s board of directors will expand to 11 seats from 10 and will include Element CEO Ben Gliklich and two from Element’s board of directors. Solstice has not disclosed further details on the board composition beyond what’s stated in the press release, the spokesperson said.
Element provides services to over 17,600 customers, according to a presentation. The company generates 73% of its revenue from its electronics segment. The remaining 27% comes from Element’s specialties business.
“Within electronics, approximately 75% of sales come from B2B markets, meaning enterprise end markets that have more predictable, higher value demand,” Gliklich said during a call on Monday. “More than 20% of our sales come from the data center market, and that percentage is growing. Nearly everything we sell is consumable, and our business is highly qualified with high switching costs that insulate us from the volatility of capital cycles.”
The deal is expected to expand Solstice’s presence in artificial intelligence infrastructure, connecting its electronics, packaging and thermal management capabilities with data center cooling and refrigerant application solutions.
Additionally, the combined portfolio will be “better aligned to durable, high-growth end markets,” including copper interconnects and uranium conversion and related nuclear services, Sewell said on the call.
“At the same time, we will be diversified across end markets and geographies with balanced exposure across the U.S., [Europe, the Middle East, and Africa] and the rest of the world,” Sewell said. “That combination of growth and diversification will give us both upside to powerful secular demand and resilience through cycles. We believe this transaction will create a stronger Solstice, more innovative, more balanced and better positioned to invest for customers and create long-term value for shareholders.”
The Element acquisition accelerates Solstice’s financial growth strategy, leading to “faster sales and earnings growth as well as enhanced cash generation,” Sewell said.
“Both companies have spent decades earning the trust of some of the most demanding customers in the world,” the Solstice CEO said. “Together, we will have the technology, scale and talent to help those customers solve increasingly complex challenges. And when our customers win, we will win with them.”
Element has over 5,200 employees and operates 62 manufacturing and R&D facilities in 18 countries, according to its website. Out of the manufacturing sites, seven are located in the United States, according to a securities filing.
Element was established in 1785, starting out under W. Canning & Co. as a metal finishing equipment supplier in Birmingham, England, according to the company’s website.
In 2014, the specialty chemicals manufacturer went public on the New York Stock Exchange under the Platform Specialty Products name. Element changed to its current name in 2019.
