Clariant reaches agreement to sell its Pigments business unit, marking the completion of its planned sale

A consortium of Heubach Group SK Capital Partners has entered into a definitive agreement to acquire Clariant's pigment business

· Enterprise value of CHF 805 million to CHF 855 million (subject to CHF 50 million earn-out payment) equivalent to April 2021 independently adjusted earnings before interest, tax, depreciation and amortization (EBITDA) 10.
7 to 11.
4 times (LTM)

· Clariant will reinvest to become a 20% shareholder in the combined business

·  Delivery is expected to be completed in the first half of 2022

Shanghai, China / Moutensz, Switzerland, June 15, 2021 - Clariant, a focused, sustainable and innovative specialty chemical company, announced that it has entered into a definitive agreement to sell its pigments business to the Heubach Group (“Heubach”) and A consortium established by SK Capital Partners (“SK Capital”) on a cash-free and debt-free basis with an enterprise value of CHF 805 million to CHF 855 million, earn-out payment of CHF 50 million The payment will depend on the financial performance of Clariant's pigment business in 2021, representing between 10.
7 and 11.
4 times (LTM) independently adjusted 12-month earnings before interest, tax, depreciation and amortization (EBITDA) in April 2021
.

When the transaction closes, Clariant will reinvest to become a 20% shareholder in the ultimate holding company, along with Heubach and SK Capital
.
The combined company will be a global pigments company with approximately 3,000 employees, annual sales of more than 900 million euros, and strong service and production capabilities around the world
.
This reinvestment enables Clariant to further benefit from the increased profitability of the pigments business as a result of the synergy program, to participate in future growth opportunities and to leverage the synergies of the combined Heubach pigments business
.

The transaction is subject to prescribed closing conditions and regulatory approvals and is expected to close in the first half of 2022
.
Clariant's pigments business' stake in Infraserv Höchst, Germany, was not part of the transaction
.

Conrad Keijzer, CEO of Clariant, said: “We are delighted to announce an agreement with Heubach and SK Capital to sell our pigments business
.
This achievement represents the planned sale and portfolio repositioning announced in July 2018 The final step
.
We believe that through Heubach and SK Capital, we have found the right buyer for our clients, colleagues and other stakeholders
.
Now our Catalyst and natural resource revenue and profitability work to go
.
”

Johann Heubach, CEO of the Heubach Group, said: “We have been in the pigment industry for over 200 years
.
My late father and I set out to drive the consolidation of the pigment industry, and the merger of Heubach with the Clariant Pigments business unit is part of that vision.
Important milestone
.
Heubach and Clariant Pigments are a match made in heaven
.
Industry-leading technology, a product portfolio serving a wide range of customer needs, combined with global production and service coverage, will enable the newly formed Heubach Group to develop a portfolio of companies in coatings, plastics, inks and In the field of professional applications, we serve global customers with industry-leading products and services
.
”

Aaron Davenport, Managing Director of SK Capital, said: "Clariant Pigments is a leading global provider of pigment solutions, and together with our new partners, the Heubach Group and Clariant, we see an important opportunity to create significant value for all stakeholders
.
"

Once the transaction closes, Clariant will finalize its sale plan, along with the previously sold medical packaging and masterbatch businesses, as part of an upgrade to its product portfolio
.
The sale of the Pigments business unit marks Clariant's transformation into a high-value specialty chemicals company with above-market growth, higher profitability and stronger cash generation
.
Proceeds from the sale of the Pigments business unit will be used to invest in growth projects in core business areas, implement sustainability and innovation strategies, fund performance improvement initiatives, strengthen Clariant's balance sheet, and reinvest in Clariant's combined Heubach portfolio in the paint business
.

Clariant's Pigments business unit is a leading global supplier of high-quality organic pigments, pigment preparations and dyestuffs for a wide range of applications in the automotive, industrial and architectural coatings and plastics industries
.
In 2020, the business unit's 1,900 employees generated independently adjusted sales of around CHF 850 ​​million
.