MOSCOW (MRC) -- Specialty chemicals company LANXESS completed the second-largest acquisition in its history on August 3 with the takeover of Emerald Kalama Chemical, as per the company's press release.
The US-based specialty chemicals manufacturer was majority-owned by affiliates of private equity firm American Securities LLC. All required regulatory approvals have been received. The enterprise value of Emerald Kalama Chemical was USD1.075 billion (EUR 900 million). After deducting liabilities, the purchase price was approximately USD 1.04 billion (EUR870 million), which LANXESS financed from existing liquidity.
“Emerald Kalama Chemical gives us another major boost on our growth path. The new businesses are an optimal strategic fit for us. We are strengthening our position in markets with attractive growth rates and opening up new high-margin application areas, especially in the beverage and food sector or in cleaning and cosmetic products. What's more, Emerald Kalama Chemical is perfectly backward integrated - strengthening our value chain in Consumer Protection. This segment is thus an important engine on the way to making LANXESS even more stable and profitable,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.
With the closing of the transaction, LANXESS grows by around 470 employees and the three production sites in Kalama/Washington (USA), Rotterdam (Netherlands) and Widnes (Great Britain).
In 2020, Emerald Kalama Chemical achieved global sales of approximately USD425 million (EUR 375 million) and EBITDA pre exceptionals of around USD90 million (EUR80 million). Within three years, LANXESS expects an additional annual EBITDA contribution of around USD30 million (EUR25 million) from synergy effects. The acquisition will already be earnings per share accretive in the first fiscal year after its completion.
As MRC reported earlier, in April 2021, LANXESS expanded its Colortherm Yellow pigment range for heat-resistant high-performance plastics. Two new inorganic yellow pigments are now available, namely Colortherm Yellow 5 and Colortherm Yellow 26.
We remind that Russia's output of chemical products rose in June 2021 by 10.2% year on year. However, production of basic chemicals increased year on year by 8.2% in the first six months of 2021. according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, polymers in primary forms and synthetic rubbers accounted for the greatest increase in the output in January-June 2021.
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.
MRC