Univar To Buy Nexeo Solutions For $2 Bln

(RTTNews) - Univar Inc. (UNVR), a chemical and ingredient distributor, Monday said it agreed to buy Nexeo Solutions Inc. (NXEO) in a cash and stock transaction valued at about $2.0 billion.

Univar will pay $3.29 in cash and 0.305 shares of Univar stock for each Nexeo share, representing a purchase price of $11.65 per share of Nexeo common stock. Univar will also assume Nexeo's debt and other obligations.

Univar plans to fund the cash portion of the deal with a combination of available cash and bank financing.

Univar's president and CEO, David Jukes, said, "We expect the transaction to be accretive to earnings and cash flow beginning in the first full year post closing and to generate $100 million of annual run rate cost savings by the third year following close and reduce annual capital expenditures by $15 million immediately."

"We expect to leverage Univar's leading e-commerce and digital capabilities across Nexeo's financial systems and centralized ERP platform to accelerate the digital transformation already underway at Univar and reduce costs, while enhancing the ease of doing business," Jukes added.

The deal is expected to deliver $100 million, or about $0.43 per share in annual run-rate cost savings by the third year following close, and immediately reduce ongoing annual capital expenditures by $15 million.

The acquisitions has been unanimously approved by the Boards of both companies, and is anticipated to close in the first half of 2019, subject to the approval of both Univar and Nexeo shareholders, as well as receipt of regulatory approvals.

Shares of Nexeo gained $1.49 or 14.89% in the extended trading session, following the news.