(Bloomberg) -- Element Solutions Inc. Chief Executive Officer Benjamin Gliklich said he sees “an opportunity for incremental M&A” to build its advanced electronics business while holding onto its industrial and specialty chemicals operations.

Asked about whether Element Solutions would spin out the industrial and specialty chemicals business to focus on electronics, Gliklich said in a Bloomberg Radio interview that the two fit together because they are similar in nature, but for different customers. 

“This is a great business, great customer intimacy, interesting growth drivers and generates a lot of cash,” he said.

Gliklich said he’s excited to deploy “strong cash flows” to fund future M&A opportunities as the company converts earnings into cash very efficiently given its modest capital requirements.

“There is an opportunity for incremental M&A within our businesses, very attractive returns and to support what will be pretty compelling organic growth in the near term,” he said. 

Shares of Florida-based Element Solutions have gained 17% this year, giving it a market value of $6.5 billion. Last month, the specialty chemicals company raised its guidance for the second quarter and full-year 2024 and increased its 2024 adjusted forecast for earnings before interest, taxes depreciation and amortization from $515 million to $530 million to a revised range of $530 million to $545 million.

Gliklich said he expects artificial intelligence to be a demand driver for the long term in the electronics market. He sees a “gigantic” market for AI application in electronics hardware as it moves from a support tool to a “decision maker.” 

“Eventually,” he said, “we’re going to replace things like forklift operators with boxes and smartphones, which were the last big thing sort of capacitated by the human population.”

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