Eastman plans to modify and restart Sterling's currently idled plasticizer manufacturing facility to produce non-phthalate plasticizers, including Eastman 168™ non-phthalate plasticizers. This additional capacity will enable the company's Performance Chemicals and Intermediates (PCI) segment to serve the growing market demand for non-phthalate alternatives. In the North American and European non-phthalate plasticizers markets, total sales volume is expected to increase at a compounded annual rate of approximately seven percent over the next five years.
“This acquisition supports our growth strategy for our plasticizer product line, and will enable us to keep pace with the growing demand for non-phthalate alternatives, like our Eastman 168™,” said Ron Lindsay, executive vice president, performance chemicals and intermediates, and fibers. “We look forward to working with Sterling employees as we bring this additional capacity online and continue to grow this business.”
The acquisition also includes Sterling's acetic acid production facility and its supply to BP Amoco Chemical Company under a long-term production agreement.
The transaction, which has been approved by both boards of directors, is expected to be completed after receipt of required regulatory approvals, approval of Sterling's stockholders, and satisfaction of other customary closing conditions. It is expected to be funded with available cash. Oppenheimer & Co. Inc. is acting as exclusive financial advisor to Eastman on this transaction and Eastman's legal counsel is Jones Day.