The enterprise value of Emerald Kalama Chemical amounts to $1.075 billion. After deducting debt-like items, the purchase price is around $1.04 billion (EUR 867 million), which LANXESS will finance from existing liquidity
Specialty chemicals company LANXESS has signed a binding agreement to acquire 100 per cent shares in Emerald Kalama Chemical on 15 February 2021. The US-based company is a globally leading manufacturer of specialty chemicals, especially for the consumer segment, and is majority-owned by affiliates of the US private equity firm American Securities LLC.
“We are gaining further momentum on our growth course. 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,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.
The enterprise value of Emerald Kalama Chemical amounts to $1.075 billion. After deducting debt-like items, the purchase price is around $1.04 billion (EUR 867 million), which LANXESS will finance from existing liquidity. The transaction is expected to be completed in the second half of 2021. It is still subject to approval by the relevant authorities.
In 2020, Emerald Kalama Chemical achieved sales of around USD 425 million and EBITDA pre exceptionals of approximately $90 million. Within three years following the completion of the transaction, LANXESS expects an additional annual EBITDA contribution of around $30 million (EUR 25 million) from synergy effects. The acquisition will already be earnings per share accretive in the first fiscal year after its completion.
Emerald Kalama Chemical employs approximately 500 employees worldwide and runs production sites in Kalama, Washington (USA), Rotterdam (Netherlands) and Widnes (Great Britain). Emerald Kalama Chemical generates around 45 percent of its turnover in North America. “
Emerald Kalama Chemical has a very efficient setup, bundling all its production activities at only three sites. That is why we expect to integrate the new business very quickly,” said Zachert.
Emerald Kalama Chemical generates about 75 percent of its turnover with specialties in the consumer segment. These include preservatives for food, household and cosmetic applications, flavors and fragrances as well as products for animal nutrition. The remaining 25 percent of sales come from the specialty chemicals business for industrial applications, including the plastics and adhesives industries.
