• Smartech acquisition showcases Hexion’s focus on integrating advanced technologies
• Financial position supports organic and inorganic growth avenues

Hexion, a Columbus, Ohio-based company specializing in adhesives and performance materials, will pursue acquisitions to enhance its market position and technological capabilities, chief commercial officer Burt Capel told this news service.

The company’s recent purchase of Smartech marked a return to dealmaking after a decade-long hiatus and exemplifies its commitment to integrating advanced technologies into its operations, he said.

Hexion’s M&A strategy prioritizes acquisitions that strengthen its product portfolio and address emerging industry trends, focusing on sectors like construction and building materials, he said. These acquisitions are aimed at meeting customer demand for efficiency, sustainability, and quality improvement.

This strategy focuses on targets with relevant technical capabilities, technologies, and opportunities that solve specific segment challenges, rather than just being driven by revenue or size, Capel said. Customer intimacy, understanding vertical markets, and responding to increasing demand in construction and building industries are key priorities, he added.

The acquisition of Smartech, a technology company specializing in artificial intelligence (AI)-driven autonomous manufacturing solutions, was signed in December and represents a strategic shift for Hexion.

By combining Smartech’s expertise in AI and machine learning with Hexion’s capabilities in resins and wood processing, the company aims to deliver significant gains in production efficiency, especially in the face of challenges such as rising raw material costs and supply chain disruptions, according to a press release.

Smartech was a “great acquisition” that fits well with Hexion’s vertical integration and position in the market, Capel said. The acquisition expands Hexion’s footprint globally, particularly in the powders segment. The deal serves as a blueprint of the type of M&A targeted by the company, Capel said.

The company plans to engage external advisors primarily during the execution phase of acquisitions, to provide support to Hexion’s internal teams, Capel said.

Hexion’s financial position supports its ability to pursue strategic acquisitions, Capel said, though he did not disclose financial information.

Mega-trends like housing and construction influence its strategy, and while economic cycles affect these segments, incremental growth opportunities are expected in several regions, he explained.

Hexion operates across North America, Latin America, Australia, and New Zealand, in industries including wood products, mining, and oil fields.

The company, which was founded in 1899, remains focused on long-term competitiveness and stability, with no defined timeline for an exit. Hexion has been under the ownership of American Securities since March 2022.

This ownership structure has provided Hexion with the resources to concentrate on its core businesses and pursue its strategic goals, Capel said.

“Our priority is to continue building on our solid foundation while pursuing opportunities that align with our strategic vision,” the executive added.