Alfa Seeks Loan For Eastman Purchase

DAK Americas, a unit of Mexican conglomerate Alfa, is acquiring Eastman Chemical’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment for $600m. Enrique Flores, director of corporate communications at Alfa, says the company is in talks to obtain a 3-year bullet credit facility to finance the acquisition. Terms have not been set and Flores declines to disclose which banks Alfa is talking to, saying only that the loan is likely to be syndicated due to the size of the transaction. The deal includes 3 petrochemical plants in South Carolina. Alfa estimates that the business generated revenue of $405m in H1 2010. Carlos Peyrelongue, equity analyst at Bank of America Merrill Lynch (BAML), says that the price is fair and potential synergies could make the deal non-dilutive. Martin Gonzalez, equity analyst at Mexico-based Invex, says the acquisition will strengthen Alfa’s polyester business while expanding its presence in North America. The deal is expected to close by year-end. BAML advised Eastman. Flores declines to say what financial advisors Alfa worked with.