MOSCOW (MRC) -- US specialty chemicals company Element Solutions has completed its previously announced $500m acquisition of France-based Coventya Holding SAS, said the company.
Element Solutions Inc, a global and diversified specialty chemicals company, announced today that it has closed its previously announced acquisition of Coventya Holding SAS, a global provider of specialty chemicals for the surface finishing industry. Coventya joins MacDermid Enthone Industrial Solutions and will be reported within the Company’s Industrial & Specialty segment.
Coventya is expected to generate annual sales of approximately USD190 million and adjusted EBITDA of greater than USD35 million for its fiscal year 2021 ending in September. Including annualized synergies of at least USD15 million expected to be achieved within two years, the purchase price represents less than 10x Coventya’s projected fiscal year 2021 adjusted EBITDA. The total consideration of approximately $500 million was funded with USD400 million of additional Term Loan B debt and cash on hand. The add-on tranche of Term Loan B matures in January 2026 and has an effective interest rate of less than 2% after giving effect to cross-currency swaps into fixed-rate euro-denominated debt.
President and Chief Executive Officer Benjamin Gliklich said, “We are excited to welcome Coventya and its talented people to the Element Solutions family. The more time we spend with the Coventya team, the more enthusiastic we have become about the potential from this combination. We believe our MacDermid Enthone Industrial Solutions business will benefit significantly from Coventya’s added scale and complementary product offerings, and so will our customers from a larger, more comprehensive set of solutions and deeper technical know-how. On an annualized basis, we expect the acquisition to be approximately 5% accretive to our adjusted EPS, based on our previously announced guidance of USD1.35 or greater for 2021 before the impact of the acquisition. This accretion does not include run rate cost synergies of at least USD15 million that we expect to realize within the next two years."
As per MRC, Element Solutions says it has acquired DMP Corporation (Rock Hill, South Carolina), a provider of turnkey wastewater treatment and recycling products and services for the manufacturing sector. Terms of the transaction, including purchase price, were not disclosed. DMP will, along with Element’s existing metals recycling business, form MacDermic Envio Solutions, a new business unit within the company’s industrial solutions segment.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
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