Evonik successfully acquires PeroxyChem

U.Scourt rejected a U.SFederal Trade Commission's blocking lawsuit
which recognized peroxyChem's specialty hydrogen peroxide businessenvironmentally friendly hydrogen peroxide and peroxyacetic acid products grew at a higher-than-market rate
a few days ago, Evonik Industries Group paid $640 million to successfully complete its acquisition of PeroxyChemThe move comes after a d.Ccourt in charge rejected a lawsuit filed by the Federal Trade Commission to block the takeover"For Evonik, the result is a welcome one, " said Mr Culleman, chairman of Evonik"In its judgment, the Court agreed with our view of the hydrogen peroxide market, in particular the core strength of the PeroxyChem portfolio in the specialty application marketThis acquisition presents us with additional growth opportunities, especially in the environmentally friendly disinfectant market"
Evonik signed an agreement with One Equity Partners, JPMorgan's private commercial banking arm, in late 2018 to acquire PeroxyChemPeroxyChem is a producer of hydrogen peroxide (H2O2) and peroxyacetic acid (PAA) and has a strong market position in highly profitable specialty applicationsAntitrust authorities in other countries, with the exception of the United States, have approved the transactionBut in August 2019, the U.SFederal Trade Commission filed a lawsuit to block the acquisition Bruce Lerner, chief executive of PeroxyChem, expressed satisfaction with the decision: "Despite market uncertainty, we have a strong performance in 2019 In a challenging economy, the company's sales and earnings have grown further Business integration between the two companies will motivate employees to develop better solutions for their customers "
2019, PeroxyChem's sales reached approximately $300 million, with adjusted EBITDA of more than $64 million (approximately $300 million in 2018 and adjusted EBITDA of approximately $60 million) Evonik's peroxide business is also doing well in 2019 In recent years, Evonik's continued strategic focus on specialty chemicals has led to a positive development in its peroxide business, with increasing business revenues, especially its EBITDA margin for 2019, which is fully in line with the company's overall target range of 18% -
20% PeroxyChem's plant in Prince George's, British Columbia, Canada, will be sold in due course to comply with antitrust requirements The plant mainly produces standard hydrogen peroxide products For PeroxyChem and Evonik, the plant's revenue as a percentage of the company's total revenue is negligible "Last year, Viacem's financial position improved further by divesting its methyl acrylates business," said Ute Wolf, its chief financial officer "As planned, we will use some of our earnings to selectively expand some high-margin, cyclical, high-proportion specialty products and strong free cash flow." "
the market for hydrogen peroxide and peroxyacetic acid is developing well, thanks to sustainable development trends Hydrogen peroxide is an environmentally friendly and resource-efficient chemical Hydrogen peroxide has become one of the purest and most versatile chemicals because it is only broken down into hydrogen and water during processing Sustainable disinfectants are the main areas of application driving demand growth PeroxyChem's hydrogen peroxide and peroxyacetic acid business focuses on low-recurring end-users in the environmental protection, food safety and electronic semiconductor industries against this backdrop, PeroxyChem built a wastewater treatment plant using oxyacetic acid in Memphis, Tennessee, USA, in 2019 Based on a long-term supply agreement with the city of Memphis, the plant will generate steady revenue starting in 2020 Capital expenditures at the plant have been fully covered by PeroxyChem As agreed in the contract, the acquisition price increased from the initially announced $625 million to $640 million, given the successful completion and on-time implementation of the project Given the strong complementarities between the two companies' global operations, Evonik expects the combined global business to generate $20 million in synergies , the same as previously announced, particularly in operations and logistics, portfolio expansion and new technology development These synergies will be fully realized by the end of 2022 based on financial results for 2019, the acquisition price (corporate value), including synergies, is approximately 7.6 times annual adjusted EBITDA, excluding synergies, which is 9.9 times The acquisition will have a positive impact on Evonik's adjusted earnings per share and free cash flow for FY2020 The transaction is completed on February 3, 2020 From this date, the PeroxyChem business will be fully integrated into Evonik acquisition business will be incorporated into the Evonik Resource Efficiency business segment Integration will begin immediately PeroxyChem, with more than 100 years of history, is headquartered in Philadelphia, Pennsylvania, USA, with approximately 600 employees and 8 production sites worldwide, with mainly in North America and manufacturing facilities in Germany, Spain and Thailand Evonik is one of the world's largest producers of hydrogen peroxide Its active oxide line of business has decades of experience in the production of hydrogen peroxide and its related products, with 13 production sites worldwide Evonik Is the world's leading specialty chemicals company Focusing on the specialty chemical business, customer-oriented innovation capabilities, and a corporate culture that advocates trust and performance, it is at the core of Evonik's strategy, driving its continued profitability growth and achieving higher corporate value In addition, Evonik's growth is particularly due to its close customer relationships and market leadership Evonik operates in more than 100 countries and regions and employs more than 32,000 people In fiscal 2018, Evonik generated sales of approximately EUR 13.3 billion and operating profit (adjusted ebitda and amortisation) of EUR 2.15 billion