26th Mar 2020 10:56
(Alliance News) - FTSE 250-listed chemicals firm Synthomer PLC on Thursday said its acquisition of Omnova Solutions Inc has been cleared and is expected to be sealed in the beginning of April.
The company also added that it will not pay a final dividend, in a bid to save cash amid the Covid-19 outbreak.
One of the conditions set by the European Commission for the acquisition to be approved was for Synthomer to dispose of the PYRATEX VP Latex business, which contributed 0.5% of its sales in September.
Synthomer said: "The acquisition materially strengthens Synthomer's presence in North America, as well as increases its presence in Europe and Asia, including further penetration into the high growth Chinese market. Synthomer intends to utilise best practices from across the enlarged group to improve productivity and reduce costs."
On its trading, the company said it has made a "solid start" to its current financial year.
"Whilst the impact on both production and demand from Covid-19 has been limited to date, the ongoing spread of the virus clearly presents significant uncertainty," Synthomer said.
The company said that as a result, it will not recommend paying a final dividend for 2019.
Synthomer said: "This decision will be reviewed later in the year once the outlook becomes clearer. The board believes that this is an appropriate and prudent measure to take as it seeks to preserve Synthomer's strong liquidity, cashflow and financial position through these uncertain times."
Synthomer shares were 3.0% higher at 222.00 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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