Omnova to hit road next week with $250 million eight-year deal to help fund Eliokem acquisition

By Paul Deckelman and Sara Rosenberg

New York, Oct. 12 - Omnova Solutions Corp. will sell $250 million of eight-year senior notes as part of the financing for its recently announced $300 million acquisition of French chemical company Eliokem International SAS, and the roadshow for the offering is expected to begin "next week sometime," according to a senior company executive.

Michael E. Hicks, Omnova's senior vice president for finance and chief financial officer, also told Prospect News on Tuesday that he expects the deal to price and close by the end of the month.

Hicks said that Deutsche Bank Securities, Inc. will be the left-hand lead joint bookrunner for the Rule 144A offering, with Jefferies & Co. Inc. as the other joint bookrunner, while KeyBanc Capital Markets will be the deal's lead manager.

The notes will have four years of call protection, he said.

In announcing the deal, Omnova said that it plans to use the proceeds from the bonds and from a new $200 million term loan to fund the Eliokem acquisition, to repay or replace all amounts outstanding under its existing term loan and to pay related fees and expenses.

A loan-market source said Tuesday that Omnova will launch its planned term loan at a bank meeting on Thursday, with Deutsche Bank and JPMorgan acting as the lead banks for that transaction.

Besides that term loan, Omnova has additionally said that it intends to extend and increase the size of its unused asset-based credit facility to $100 million and expects to have $40 million of cash at the closing of the Eliokem acquisition.

Omnova, a Fairlawn, Ohio-based maker of emulsion polymers, specialty chemicals and decorative and functional surfaces for commercial, industrial and residential end uses, announced on Sept. 22 that it plans to acquire France-based Eliokem from its current owner, AXA Private Equity, for €227.5 million, or about $300 million. It said that the acquisition of Eliokem and its combination with Omnova's existing chemicals business will create a company with pro-forma sales of over $1 billion and adjusted EBITDA of $129 million and will sharply increase Omnova's current market presence in Europe and Asia, which will account for about 40% of total sales.

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