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MOSCOW (MRC) -- Lanxess says it has
signed a binding agreement to acquire specialty chemicals manufacturer Emerald
Kalama Chemical (Cuyahoga Falls, Ohio) for an enterprise value of USD1.08
billion; USD1.04 billion, after deducting debt-like items, reported Chemweek.
The transaction is expected to
close in the second half of 2021, subject to approval by the relevant
authorities, and it will be financed from Lanxess’s existing liquidity, the
company says. The deal forms part of Lanxess’s targeted portfolio expansion in
the consumer protection segment, the company says.
Affiliates of the
private equity firm American Securities own a majority of Emerald Kalama, a
company specialized in the production of specialties for the consumer segment,
Lanxess says.
Emerald Kalama achieved 2020 sales of about USD425 million
and EBITDA pre exceptionals of approximately USD90 million. Within three years
following completion of the transaction, Lanxess expects an additional
annualized EBITDA contribution of about USD30 million from synergy effects. The
acquisition will be earnings-per-share accretive in the first fiscal year after
completion, the company says.
“The businesses of Emerald Kalama Chemical
are an ideal fit for us. We will further strengthen our consumer-protection
segment and open up new application areas with strong margins, for example in
the food industry and animal health sector. In addition, we will also enlarge
our presence in our growth region of North America. All this will make us even
more profitable and stable,” says Matthias Zachert, chairman of
Lanxess.
Emerald Kalama generates about 45% of its revenue in North
America. About 75% of its sales are from preservatives for food, household, and
cosmetic applications; flavors and fragrances; as well as products for animal
nutrition. The remaining 25% are from the company's specialty chemicals business
for industrial applications, including the plastics and adhesives industries,
Lanxess says.
Emerald Kalama has about 500 employees worldwide and runs
production sites at Kalama, Washington; Rotterdam, Netherlands; and Widnes, UK.
“Emerald Kalama Chemical has a very efficient set-up, bundling all its
production activities at only three sites. That is why we expect to integrate
the new business very quickly,” says Zachert.
As MRC informed before,
in January, 2021, Lanxess completed the sale of its membrane business to French
resource management firm SUEZ. The deal was previously announced in July, 2020,
as Lanxess realigned its water treatment technologies segment, resulting in the
sale of its reverse osmosis membrane business.
We remind that
Russia's output of chemical products rose in November 2020 by 9.5% year on year.
At the same time, production of basic chemicals increased in the first eleven
months of 2020 by 6.6% year on year, according to Rosstat's data. According to
the Federal State Statistics Service of the Russian Federation, polymers in
primary form accounted for the greatest increase in the January-November 2020
output. November production of polymers in primary form rose to 896,000 tonnes
from 852,000 tonnes in October. Overall output of polymers in primary form
totalled 9,240,000 tonnes over the stated period, up by 17.1% year on
year.
Lanxess is a leading specialty chemicals company with about 19,200
employees in 25 countries. The company is currently represented at 74 production
sites worldwide. The core business of Lanxess is the development, manufacturing
and marketing of chemical intermediates, additives, specialty chemicals and
plastics. Through Arlanxeo, the joint venture with Saudi Aramco, Lanxess is also
a leading supplier of synthetic rubber. |
