Huntsman Corp. will buy spray polyurethane foam insulation specialist Demilec Inc. from private equity's Sun Capital Partners.
Huntsman, based in The Woodlands, Texas, is paying $350 million in an all-cash deal expected to close by the end of the second quarter of 2018.
In the latest financial year, Demilec had annual sales of about $170 million.
Its two manufacturing facilities, located in Arlington, Texas, and Boisbriand, Quebec, produce a full suite of MDI-based SPF formulations. These are sold via distributors, and marketed directly to applicators.
It makes both closed-cell and open-cell SPF formulations. The company focuses on eco-friendly products with renewable and recyclable content, said Huntsman.
"Demilec has pioneered MDI SPF insulation and coating technologies for more than 30 years, building a strong market reputation," said Tony Hankins, president of Huntsman's polyurethanes division.
"Demilec and the entire SPF industry has delivered strong double-digit growth, which we expect to be sustained."
At the end of February, while reviewing MDI prices, Huntsman CEO Peter Huntsman told investors that his firm was interested in acquisitions that will improve margins, with consistent earnings that grow faster than GDP.