Solstice Advanced Materials (NASDAQ: SOLS) announced an agreement to acquire Element Solutions in a cash-and-stock transaction valued at approximately $14.5 billion, including the assumption of net debt, executives confirmed on a conference call.
Under the terms outlined by Solstice President and Chief Executive Officer David Sewell, Element Solutions shareholders will receive $10 in cash and 0.5 shares of Solstice common stock for each Element Solutions share held. The consideration represents a 15% premium to Element Solutions’ closing price on Friday. Upon closing, Element Solutions shareholders are expected to own approximately 44% of the combined company.
The combined entity will operate under the Solstice name, with Sewell continuing as chief executive officer. The board will comprise 11 directors, including Element Solutions CEO Ben Gliklich and two additional designees from the Element Solutions board, subject to standard governance procedures. Solstice has secured fully committed financing and expects the transaction to close in the first half of 2027, pending shareholder approvals from both companies, regulatory clearances, and other customary closing conditions.
Companies Cite Electronics and Data Center Demand
Sewell said the transaction would create a global advanced materials leader with combined 2025 net sales of approximately $6.8 billion and adjusted EBITDA of $1.7 billion. The combined business would hold leading positions across end markets supported by more than 8,300 patents and pending applications.
Solstice framed the deal as an acceleration of its strategy following its separation as an independent company last October. Sewell said the acquisition would strengthen Solstice’s position in electronic materials, particularly across semiconductor fabrication, packaging, assembly, and thermal management.
“Together, we will be able to deliver broader solutions, greater performance, and deeper co-innovation with customers,” Sewell said.
Executives emphasized secular demand tied to artificial intelligence, advanced computing, and data center construction. Sewell noted that denser, higher-powered chips are driving demand for advanced packaging and new thermal management materials, while also increasing requirements for data center cooling and power solutions. He added that Solstice’s existing refrigerants and uranium conversion services are relevant to the broader data center build-out.
Element Solutions CEO Calls Deal ‘Better Together’
Gliklich said Element Solutions did not put itself up for sale and was approached by Solstice. He described the deal as a strong strategic fit, citing complementary portfolios and customer relationships.
Element Solutions generates just over 70% of its revenue from electronics, Gliklich said, with the remainder from specialty businesses. Within electronics, approximately 75% of sales come from business-to-business enterprise markets, and more than 20% of total sales come from the data center market.
Gliklich said Element Solutions’ consumable products, qualification status, and high switching costs help insulate the business from capital cycle volatility. He also highlighted recent portfolio actions, including the divestiture of its graphics business, the acquisitions of Micromax and EFC, and the addition of Kuprion technology.
“This is very much a better together story, one that comes at the right time to meaningfully accelerate all facets of our business,” Gliklich said.
Synergies and Financial Targets
Solstice said it has identified more than $180 million in expected annualized run-rate cost synergies, net of costs, within three years of closing. Sewell detailed the breakdown as follows:
- Approximately $100 million from operational initiatives and operating model integration, including efficiencies across general and administrative, sales and marketing, and research and development;
- About $25 million from supply chain improvements, including raw material and procurement scale and copper recovery from deposition processes;
- About $20 million from footprint optimization;
- About $35 million from other initiatives.
Solstice Chief Financial Officer Tina Pierce said the combined company, including expected run-rate synergies, is projected to have an adjusted EBITDA margin of approximately 26%. She said the company expects medium-term revenue growth at a mid- to high-single-digit rate, with adjusted EBITDA growing faster than revenue as synergies are realized. Pierce added that the transaction is expected to be accretive to adjusted earnings per share in the first year.
Pierce said Solstice expects net leverage of about 3.5 times at closing and plans to reduce leverage below 3 times within 18 months after closing. The company’s longer-term net leverage target is 2 times to 3 times.
Executives Address Integration and Portfolio Questions
During the question-and-answer session, Sewell said the timing of the deal reflected customer demand for solutions in advanced electronics and the complementary nature of the two portfolios. He said the integration would be focused on growth, innovation, and customers, while Gliklich said the integration appears “reasonably straightforward” based on preliminary work.
Asked about Solstice’s broader portfolio, Sewell said the company does not intend to become a pure-play electronics company. He said refrigerants and nuclear are connected to the data center opportunity through cooling and power needs, and he described Solstice as a “complete solutions provider” across attractive growth markets.
On revenue synergies, Sewell said there may be near-term cross-selling opportunities through each company’s customer relationships, while longer-term opportunities could require customer qualification processes that may take around two years. Pierce said only a relatively small amount of revenue synergy is built into the company’s financial model, which is more heavily underpinned by cost synergies.
Executives also said planned investments remain included in their model, including Element Solutions’ Kuprion facilities, Solstice’s nuclear expansion, the doubling of Solstice’s sputtering targets facility in Spokane, and investments in next-generation lightweight body armor.
Sewell said Solstice does not anticipate regulatory issues, describing the transaction as “highly complementary.” Details such as the break fee are expected to be included in forthcoming disclosures.
