06.05.2016
Evonik Industries AG DE000EVNK013
DGAP-News: Evonik Industries AG: Evonik acquires Specialty & Coating Additives business of Air Products
DGAP-News: Evonik Industries AG / Key word(s): Mergers & Acquisitions
Evonik Industries AG: Evonik acquires Specialty & Coating Additives business
of Air Products
06.05.2016 / 13:27
The issuer is solely responsible for the content of this announcement.
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Evonik acquires Specialty & Coating Additives business of Air Products
- Evonik strengthens leading position in the attractive growth market for
specialty & coating additives
- Product and customer portfolios are highly complementary
- Acquisition secures leading position in North America for Evonik and
strengthens innovation
- Synergies of 80 million US dollars per year and tax benefits with a net
present value of more than 500 million US dollars expected
- Financing half with company's own funds and half with additional debt
Essen, May 6, 2016 - Evonik Industries AG is acquiring the Specialty &
Coating Additives business (Performance Materials Division) of the US
company Air Products and Chemicals, Inc. for 3.8 billion US dollars
(approx. EUR3.5 billion), strengthening its leading position on the
high-margin specialty & coating additives market. The transaction is
intended to be completed by the end of the year. It is expected that the
acquisition will be EPS accretive for Evonik in the 2017 business year.
Klaus Engel, CEO of Evonik Industries AG, said: "Evonik is already one of
the leading producers of specialty & coating additives. Air Products'
Specialty & Coating Additives business perfectly complements this
fast-growing segment. With this acquisition we are expanding our portfolio
with precisely the right markets, products and innovations and continuing
to invest in our growth and profitability."
Rapid integration
With its own strategic reorganization and creation of three independent
operational segments in 2015, Evonik established the right conditions for
integrating major acquisitions. As such, Air Products' Specialty & Coating
Additives business can be rapidly integrated into the growth segments
Nutrition & Care and
Resource Efficiency. The combined specialty & coating additives business
has a turnover of around EUR3.5 billion and an attractive EBITDA margin of
more than 20%. At the same time, Evonik is further strengthening its
leading position in rapidly growing, highly profitable markets with strong
differentiation from competitors and low dependence on commodity prices.
Highly complementary products and markets
With their products and their strong positions in the key global markets,
Evonik and the newly acquired business are highly complementary. Their
specialty & coating additives add critical and highly valuable
characteristics to their customers' products. The two businesses serve
three particularly attractive, rapidly growing core markets: coating and
adhesive additives, high-value PU foam additives, and specialty surfactants
for industrial and institutional cleaning. They target the same end
customers, but with different and complementary products. For instance,
Evonik is a leader in PU foam stabilizers while the Specialty & Coating
Additives business of Air Products is well positioned in PU foam catalysts.
Demand for these products is rising strongly, and the market for these
additives will grow far more quickly than overall demand for chemical
products.
Geographically, Evonik and the acquired division also complement each
other. While the largest portion of the Air Products' business is in North
America and Asia, Evonik is particularly strong in Europe. With the current
acquisition, Evonik is crucially boosting its standing in the North
American market, allowing it to serve the increasingly global activities of
its customers even more effectively. At the same time, by growing in North
America and Asia, Evonik is reducing its dependence on the European market
and therefore better protecting its own business against economic
fluctuations in individual regions.
Strengthening innovation
Like Evonik, Air Products' Specialty & Coating Additives business follows a
solution-oriented business model driven by intensive interaction with
customers in research and development and
outstanding technical service. The acquisition will allow Evonik to
significantly strengthen its innovation leadership.
High synergy potential and tax benefits
By optimizing production/logistics, marketing/sales and administration,
Evonik expects to generate cost synergies of 60 million US dollars per
year. These should be fully realized by 2020 at the latest. In addition,
Evonik expects to achieve revenue synergies by combining innovation
activities, leveraging the respective client bases and product portfolios,
and taking advantage of geographical adjacencies. In total, the deal is
expected to generate annual synergies of 80 million US dollars.
The transaction is partly structured as an asset deal, which will lead to
tax benefits which are typical for transactions of this nature. These
benefits amount to a net present value of more than 500 million US dollars.
Transaction financing
Half of the outlay for the acquisition will be financed with the company's
own funds, the other half with additional debt. Evonik will maintain a
strong balance sheet and continues to aim for a solid investment grade
rating after the transaction.
The planned acquisition remains subject to formal approvals from the
relevant antitrust authorities.
Additional information on Air Products' Specialty & Coating Additives
business
The Specialty & Coating Additives business of Air Products is the
Performance Materials Division within the Materials Technologies Segment of
Air Products and Chemicals, Inc. In 2015, the business generated a turnover
of around 1.1 billion US dollars and posted EBITDA of 242 million US
Dollars, which represents a margin of 22%. It has around 1,100 employees at
11 production and development locations and offers local customer support
in all key global regions.
Company information
Evonik, the creative industrial group from Germany, is one of the world
leaders
in specialty chemicals. Profitable growth and a sustained increase in the
value of the company form the heart of Evonik's corporate strategy. Its
activities focus on the key megatrends health, nutrition, resource
efficiency and globalization. Evonik benefits specifically from its
innovative prowess and integrated technology platforms.
Evonik is active in over 100 countries around the world. In fiscal 2015
more than 33,500 employees generated sales of around EUR13.5 billion and an
operating profit (adjusted EBITDA) of about EUR2.47 billion.
Disclaimer
In so far as forecasts or expectations are expressed in this Investor
Relations News or where our statements concern the future, these forecasts,
expectations or statements may involve known or unknown risks and
uncertainties. Actual results or developments may vary, depending on
changes in the operating environment. Neither Evonik Industries AG nor its
group companies assume an obligation to update the forecasts, expectations
or statements contained in this release.
Contact:
Tim Lange
Head of Investor Relations
+49 201 177-3150
[email protected]
Evonik Industries AG
Rellinghauser Straße 1-11
45128 Essen
Germany
Phone +49 201 177-01
Telefax +49 201 177-3475
www.evonik.com
Supervisory Board
Dr. Werner Müller, Chairman
Executive Board
Dr. Klaus Engel, Chairman
Dr. Ralph Sven Kaufmann
Christian Kullmann
Thomas Wessel
Ute Wolf
Registered office Essen
Registered court
Essen local court
Commercial registry B 19474
VAT ID no. DE 811160003
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06.05.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Evonik Industries AG
Rellinghauser Straße 1-11
45128 Essen
Germany
Phone: +49 (0) 201 177-01
Fax: +49 (0) 201 177-3475
E-mail: [email protected]
Internet: www.evonik.com
ISIN: DE000EVNK013, XS0911405784
WKN: EVNK01, A1TM7T
Indices: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Hamburg, Hanover, Munich,
Stuttgart; Terminbörse EUREX; Luxemburg
End of News DGAP News Service
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461159 06.05.2016
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