Element Solutions Inc

What they do

Element Solutions formulates and sells specialty chemicals and material process technologies used in customers' multi-step manufacturing processes. The company operates two reportable segments, Electronics and Specialties, serving end-markets including consumer electronics, semiconductor fabrication, high-performance computing, automotive, aerospace and offshore energy. Electronics supplies wet chemistries for metallization, surface treatments and solderable finishes, plus assembly materials such as SMT, pastes, fluxes and adhesives. Specialties supplies chemical systems that protect and decorate metal and plastic surfaces and chemistries used in water-based hydraulic control fluids for offshore energy production.

Revenue drivers

• Electronics segment — Contributed approximately 70% of 2025 net sales of $2.55 billion; includes Assembly Solutions, Circuitry Solutions and Semiconductor Solutions, and grew second quarter 2026 net sales 75% to $767 million.
• Specialties segment — Contributed approximately 30% of 2025 net sales; includes Industrial Solutions and Energy Solutions, and reported second quarter 2026 net sales of $211 million, up 14%.
• Micromax acquisition — Acquired February 2, 2026 for approximately $500 million, net of cash; a supplier of advanced electronics inks and pastes that added 31% to Electronics constant currency adjusted EBITDA growth in the second quarter of 2026.
• EFC Gases & Advanced Materials acquisition — Acquired January 2, 2026 for approximately $369 million, net of cash; a high-purity specialty gases provider that added 10% to Specialties constant currency adjusted EBITDA growth in the second quarter of 2026.

Recent performance

Second quarter 2026 net sales were $978 million, up 56% on a reported basis and 15% organically from the second quarter of 2025. Reported net income was $77 million, or $0.32 GAAP diluted EPS, compared with $48 million and $0.20 in the prior-year period. Adjusted EBITDA rose to $184 million from $136 million, with adjusted EBITDA margin increasing 120 basis points to 27.8%. Electronics net sales increased 75% to $767 million, including 29% from acquisitions and 20% organic growth; Specialties net sales increased 14% to $211 million. Cash flows from operating activities were $100 million and free cash flow was $74 million in the quarter.

Strategy

The company describes its strategy as balancing operational excellence with prudent capital allocation, focused on customer-led product development, technical sales support and supply chain optimization. It has pursued targeted acquisitions in existing and adjacent end-markets, completing EFC Gases & Advanced Materials in January 2026 and Micromax in February 2026. It funded part of the Micromax purchase with $450 million of Add-on Term Loans and replaced its $375 million revolver with a 5-year $500 million facility maturing in 2031. It also divested the MacDermid Graphics Solutions flexographic printing plate business in February 2025 for approximately $320 million, net of disposed cash, recognizing a $66.5 million gain. Separately, on July 6, 2026 the company entered an Agreement and Plan of Merger to be acquired by Solstice.

Risks

• Competitive markets — The company states it faces numerous competitors in all areas of its businesses, some with longer operating histories, greater resources, greater brand recognition and larger customer bases.
• Rapid technology and consumer preference shifts — Its markets are driven by rapidly changing consumer preferences and frequent new product introductions, requiring ongoing innovation to anticipate customer needs.
• Customer consolidation — The risk factor excerpt identifies consolidation of customers as a material risk factor that may adversely affect the business.
• Acquisition integration and financing — The company completed the EFC and Micromax acquisitions and funded part of Micromax with $450 million of Add-on Term Loans, exposing it to integration and leverage risk.

Outlook

Management increased full year 2026 adjusted EBITDA guidance to a range of $690 million to $710 million, inclusive of expected full-year contributions from the Micromax and EFC acquisitions, assuming stable exchange rates and metal prices. The company expects an adjusted EPS growth rate of approximately 20% for 2026 and third quarter 2026 adjusted EBITDA of approximately $180 million. The CEO cited an improved organic outlook during the second quarter, Micromax integration progress and Kuprion scale up. The proposed merger with Solstice, announced July 6, 2026, would exchange each share for 0.5 Solstice shares and $10.00 in cash.