Solstice Advanced Materials CEO David Sewell said Monday that Wall Street has the wrong idea about the company’s acquisition plans. element solution After a painful downturn.
“We have a generational opportunity for growth in semiconductors and advanced electronics,” Sewell told CNBC’s “Mad Money” on Monday. “The combination of our companies will give us a comprehensive product portfolio and enable us to create a truly world-leading advanced materials business in semiconductors, data centers and AI.”
Solstice announced Monday that it will acquire fellow specialty chemicals company Element Solutions in a cash and stock deal worth about $14.5 billion. Despite management’s enthusiasm for the deal, Solstice’s stock price plummeted after the announcement, closing down about 15%. Element Solutions shares fell 3%.
Mr. Sewell said he believes the decline in Solstice’s stock was driven in part by deep-pocketed traders making short-term bets on both stocks, rather than skepticism about Solstice’s integration strategy.
“We know there were a lot of hedge funds out there and a lot of arbitrage,” he said. “We have been communicating the story and the press has been very positive about the strategic rationale for this deal.”
Sewell said the acquisition expands Solstice’s exposure to the entire AI infrastructure supply chain, adding capabilities in semiconductor manufacturing, advanced chip packaging and thermal management. Combined with Solstice’s existing businesses serving data center cooling and nuclear power, the company is uniquely positioned to benefit from the rapid buildout of AI infrastructure, he said.
“This is a great growth proposition,” he said. “The demand is great, and our product portfolio now has the complete solution to help solve our customers’ biggest challenges. We know that if we deliver and deliver on our promises, the stock price will follow.”
Last fall, Solstice was spun off from a stock company and became a publicly traded company. Honeywell Technologies. Cramer’s Charitable Trust, a portfolio used by CNBC Investing Club, owns Honeywell stock. Solstice is also on the firm’s bullpen watch list.
