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Evonik to acquire US catalyst rejuvenation firm Porocel

August 27/2020

MOSCOW (MRC) -- Evonik Industries says it is acquiring catalyst rejuvenation firm Porocel Group (Houston, Texas) for USD210 million, as per the company's press release.

The purchase price is 9.1 times adjusted EBITDA in 2019, which Evonik says is an attractive valuation for a high-quality asset in the catalyst sector. The transaction will be financed by Evonik's "strong cash position" and is expected to close by the end of 2020 subject to approval by the relevant authorities, the company says.

The acquisition of Porocel expands significantly Evoniks catalyst portfolio and especially its catalyst production capabilities, the company says. Sales of the combined catalyst business are expected to grow to more than EUR500 million (USD590 million) by the end of 2025 without the need for investment in new capacities, Evonik says.

This acquisition is the next logical step in the strategic development of our portfolio. Our focus is on stable and high-margin specialty chemicals, says Christian Kullmann, chairman of Evonik. We are systematically expanding the share of our specialty businesses - and at an attractive valuation.

Porocel generated sales of approximately USD100 million with an EBITDA of about USD23 million and EBITDA margin at about 23% in 2019, which is above Evonik's target range of 18-20%, the company says. Porocel has increased its EBITDA significantly in the last three years, driven by new product development through an expansion of R&D capabilities, Evonik says. It has more than 300 employees worldwide and production facilities in the US, Canada, Luxembourg, and Singapore.

Porocel offers a technology for rejuvenation of desulfurization catalysts, which are in increasing demand for producing low-sulfur fuel, Evonik says. Rejuvenation reduces CO2 emissions by more than 50% compared with the production of new desulfurization catalysts, it says.

As MRC reported before, Dow and Evonik have recently entered into an exclusive technology partnership. Together, they plan to bring a unique method for directly synthesizing propylene glycol (PG) from propylene and hydrogen peroxide to market maturity.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's DataScope report, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.

Evonik is one of the world leaders in specialty chemicals. The focus on more specialty businesses, customer-oriented innovative prowess and a trustful and performance-oriented corporate culture form the heart of Evoniks corporate strategy. They are the lever for profitable growth and a sustained increase in the value of the company. Evonik benefits specifically from its customer proximity and leading market positions. Evonik is active in over 100 countries around the world with more than 36,000 employees.
Author:Margaret Volkova
Tags:PP, homopolymer PP, propylene, petrochemistry, Dow, Evonik, Germany, Canada, Luxembourg, Russia, Singapore, USA.
Category:General News
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