Ashland (NYSE:ASH) announced plans to acquire International Specialty Products (ISP) in an all-cash deal for $3.2 billion. The transaction values ISP at 8.88 times its 2010 EBITDA. Despite the premium price, Ashland’s stock rose on the announcement. Ashland is expected to benefit from vertical integration opportunities.

Manning Advisors sees the deal at the high end of the range for specialty chemical companies. In data collected by Bloomberg, the average deal multiple has been 7.34X across 45 transactions over the last five years.

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