Evonik acquires PeroxyChem for US$625 million

Evonik has signed an agreement with One Equity Partners (the private commercial banking division of JPMorgan Chase) to acquire PeroxyChem in the United States for US$625 million .
PeroxyChem is a manufacturer of hydrogen peroxide (H2O2) and peroxyacetic acid (PAA), and has a good market position in high-margin specialty applications.
Spend 625 million US dollars to acquire PeroxyChem of the United States.
"The acquisition of PeroxyChem will significantly enhance our growth sector resource efficiency business.
We are expanding our product portfolio for environmentally friendly and high-growth specialty applications.
In addition, we will also acquire attractive business, It is characterized by above-average growth, moderate capital intensity, and low cyclicality.
"
-Couleman, Chairman of Evonik Industries Group
"We are very pleased to work with Evonik to take the current successful business to the next level.
Two The businesses of these companies complement each other and will bring new and attractive growth opportunities for our customers and employees.
” said Bruce Lerner, President and CEO of PeroxyChem.

Hydrogen peroxide and peracetic acid are widely used and enjoy higher-than-average growth rates, especially in specialty chemicals applications where the average annual market growth rate is as high as 6%.

PeroxyChem is headquartered in the United States, and its hydrogen peroxide and peroxyacetic acid businesses focus on environmental protection, food safety, and electronic semiconductor industries, which are more sophisticated and less cyclical markets.
About three-quarters of the company's profits come from special applications in the above-mentioned fields.
“PeroxyChem’s profitability is impressive.
Its adjusted EBITDA margin is approximately 20%, and its profitability continues to be higher than Evonik’s current level.
Its business growth is strong, and its financial position is stable.
Considerable free cash flow.
"
-Ute Wolf, Chief Financial Officer of Evonik
In fiscal year 2018, PeroxyChem expects annual revenue of approximately US$300 million and adjusted EBITDA of approximately US$60 million.
The EBITDA margin will continue to be maintained at around 20%, which is attractive.
Through the complementary advantages of production, logistics, product portfolio and the launch of new technologies, Evonik expects that the combined global business will generate a synergy effect of 20 million US dollars, which will be fully realized by the end of 2022.
In fiscal year 2018, PeroxyChem expects annual revenue of approximately US$300 million and adjusted EBITDA of approximately US$60 million.
The EBITDA margin will continue to be maintained at around 20%, which is attractive.
Through the complementary advantages of production, logistics, product portfolio and the launch of new technologies, Evonik expects that the combined global business will generate a synergy effect of 20 million US dollars, which will be fully realized by the end of 2022.
In fiscal year 2018, PeroxyChem expects annual revenue of approximately US$300 million and adjusted EBITDA of approximately US$60 million.
The EBITDA margin will continue to be maintained at around 20%, which is attractive.
Through the complementary advantages of production, logistics, product portfolio and the launch of new technologies, Evonik expects that the combined global business will generate a synergy effect of 20 million US dollars, which will be fully realized by the end of 2022.

The purchase price (enterprise value) including synergies is approximately 7.
8 times the annual adjusted EBITDA, and it is 10.
4 times without considering synergies.
The transaction is expected to be completed in mid-2019 after obtaining approval from relevant authorities.
The transaction is expected to be completed in mid-2019 after obtaining approval from relevant authorities.

The acquisition is expected to have a positive impact on Evonik’s adjusted earnings per share and free cash flow in the first full fiscal year after completion.
The acquisition funds have been raised through cash and confirmed credit lines.

Both hydrogen peroxide and peracetic acid are oxidants with a wide range of applications, such as bleaching agents used in the pulp industry, and disinfectants used in food processing or wastewater treatment industries.
Water is the only by-product produced after the hydrogen peroxide reaction, so it is extremely environmentally friendly.

Thanks to its product attributes, hydrogen peroxide is increasingly being used in high-tech industries that have attracted much attention, such as semiconductor manufacturing, medical applications, and aerospace technology.
Logistics, long-term customer relationships and diversified terminal market applications make this business highly adaptable.
PeroxyChem has a history of more than 100 years and is an innovative manufacturer in the field of hydrogen peroxide and peroxyacetic acid.
The company is headquartered in Philadelphia, Pennsylvania, USA.
It has approximately 600 employees and 8 production bases around the world.
The main base is located in North America.
It also has production plants in Germany, Spain and Thailand.

Evonik is one of the world's largest hydrogen peroxide producers.
Its active oxide business line has decades of experience in the production of hydrogen peroxide and related products, and has 13 production bases around the world.

Source: Ai Tubang Public Account