The new entity, which will combine the technologies, geographies and product portfolios of both firms in speciality materials, aims to achieve at least $65m in annual run-rate cost synergies within 24 to 36 months after the closing of the deal

shaking-hands-g98e87a53f_1280

The deal will create a global leader in specialty materials with a broad portfolio of solutions. (Credit: Gerd Altmann from Pixabay)

Speciality materials firm Schweitzer-Mauduit International (SWM) has agreed to merge with Neenah in an all-stock merger deal, creating a company with combined revenues of about $3bn.

The deal will combine the technologies, geographies and product portfolios of both firms in speciality materials.

The combined entity will take advantage of the strong positions of the two companies in categories, including filtration, healthcare & wellness, protective & adhesive solutions, industrial solutions, and packaging & speciality paper.

It aims to achieve at least $65m in annual run-rate cost synergies within 24-36 months after the closing of the deal.

The boards of directors of both companies approved the agreement, under which the shareholders of Neenah will receive 1.358 shares of SWM common stock for each share of Neenah common stock owned.

Upon completion of the deal, SWM shareholders will own about 58% of the combined firm, while Neenah stockholders will own about 42% of the combined entity.

Once the deal is closed, Neenah’s president and CEO Julie Schertell will serve as president and CEO of the combined entity, which will be based in Alpharetta, Georgia.

SWM CEO Dr Jeff Kramer will serve as a strategic advisor for the combined firm, which will have a new name.

The transaction is expected to complete in the second half of 2022, subject to shareholders’ approval, regulatory approvals and other customary closing conditions.

Commenting on the deal, Kramer said: “This merger is an exciting next step on our journey and one that will deliver significant shareholder value.

“SWM has earned a reputation as a critical solutions provider. The combination with Neenah is a continuation of our strategic intent to solve our customers’ most complex design challenges.”

Schertell said: “This combination is a unique opportunity to accelerate our growth strategy and continue the transformation of our business, creating a global leader in speciality materials with strong and defensible positions in attractive end-markets.”