THE WOODLANDS, Texas—Huntsman has agreed to pay $350 million in cash for Icynene-Lapolla, furthering its spray foam strategy. The deal should close in the first half of 2020.
Icynene-Lapolla has annual sales of around $230 million.
The deal expands Huntsman's footprint in the growing North American spray foam market, and, according to CEO Peter Huntsman, provides the Texas-based company with a strong foundation to expand its business.
"As the demand for energy efficiency continues to grow, both in residential and commercial construction, this combination of companies will provide Huntsman with the largest global array of spray foam technology, integration of raw materials and associates," he said. "This is the size and type of downstream assets that we will continue to add to our company as we strengthen margins, move downstream and be less reliant on a single product or application."
Lapolla was founded in 2005 by Doug Kramer, who became the CEO of Icynene-Lapolla after the two companies joined together in 2018.
That March of 2018, Huntsman expanded its own spray foam business when it paid $350 million for Demilec. It's an area that the Texas-based company feels has significant room for growth, and the combination of the Demilec and Icynene-Lapolla technologies give it a stronger foothold.
In a news release, Huntsman management noted that spray foam businesses typically have higher margins and more consistent sales than cyclical commodities such as diisocyanates and polyols. And the combination of Demilec and Icynene-Lapolla will be a particular strength for Huntsman, according to Tony Hankins, president of Huntsman's polyurethanes division.
"I am delighted that Icynene-Lapolla is joining our downstream, high-growth MDI urethanes insulation business," he said in a statement. "Icynene-Lapolla is well recognized by architects, builders and contractors as a market leader in the manufacture and supply of high-performance, energy-efficient building envelope solutions."