Huntsman Corp. has signed an agreement to buy polyurethane spray foam maker Icynene-Lapolla for $350M in cash. The deal should close in the first half of 2020.
The deal expands Huntsman's footprint in the growing North American spray foam market. It also gains more spray foam technology to go with its Demilec business.
Mississauga, Ontario-based Icynene-Lapolla has annual sales of around $230M, putting the price at about 10 times earnings before interest, taxes, depreciation and amortiation.
Tony Hankins, president of Huntsman's polyurethanes division, said the combination of Icynene-Lapolla with its PU spray foam product range and reflective roof coatings, with Huntsman's Demilec PU spray foam business will significantly strengthen Huntsman's energy-saving insulation business.
"This combination of companies will provide Huntsman with the largest global array of spray foam technology. This is the size and type of downstream assets that we will continue to add to our company," CEO Peter Huntsman said. Huntsman is based in The Woodlands, Texas.
Lapolla Industries Inc. was founded in 2005 by Doug Kramer, who became the CEO of Icynene-Lapolla after his firm combined with Icyene Inc. in 2018. Huntsman bought Demilec in March 2018 for $350M.
Huntsman management believes that spray foam will be an important business group. These businesses typically have higher margins and more consistent sales than cyclical commodities like diisocyanates and polyols.