- Strengthening of growth segment Resource Efficiency
- Expansion of technology-driven Silica business
- Highly complementary product portfolios and regional exposures
- Contribution to strategic development of Evonik’s portfolio
Essen. Evonik Industries AG acquires the Silica business of the US company J.M. Huber for 630 million US dollars. This enables Evonik to expand its position in North America and Asia in this profitable and resilient business. "Huber Silica will significantly strengthen our growth segment Resource Efficiency," said Klaus Engel, Chairman of the Executive Board of Evonik. "In addition, it offers the opportunity to strategically develop Evonik’s portfolio."
"The Silica business has been part of Huber since the 1950s and paved the way for our company’s global expansion into engineered materials," said Mike Marberry, President and Chief Executive Officer of Huber. "While it is difficult to part with a longstanding business, we see Evonik as an excellent strategic fit for both our Silica customers and employees."
The silica market is characterized by its variety of applications and shows above-average annual growth of 4 to 6 percent. Huber’s business is especially oriented towards applications in the consumer goods industry, the dental sector for example. To date, Evonik’s silica business has been focused rather on industrial applications, for example in the tire and coatings industries. "Combining the complementary silica businesses of Evonik and Huber will strengthen an important pillar of our portfolio," explained Christian Kullmann, Board Member for Strategy at Evonik. "Also, Huber Silica is an excellent regional fit with its focus on the U.S., China and India."
For the 2016 financial year, Huber Silica is expected to achieve sales of close to 300 million US dollars and an EBITDA of 60 million US dollars. This corresponds to an attractive EBITDA margin of more than 20 percent.
Through the ideal complementarity of the two business areas, Evonik expects to generate synergies of 20 million US dollars, largely in the areas of production, logistics and procurement as well as through harmonization of the product portfolio. We expect to have all synergy measures implemented by 2021.
The depreciations customarily associated with asset deals will lead to lower future cash tax payments with a net present value of around 80 million US dollars. On this basis, the purchase price (enterprise value) including synergies and tax effects is about seven times the annual EBITDA, or 10.5 times before tax effects and synergies.
The transaction is scheduled to be completed in the second half of 2017, subject to approval by the responsible authorities. The acquisition is likely to have a positive impact on Evonik’s adjusted earnings per share as early as the first full financial year. Financing has been secured through Evonik’s own funds and committed credit facilities.
A presentation including more details can be found on our website: www.evonik.com/investor-relations/
Evonik will be hosting an Analyst & Investor call on Monday, December 12, 2016, 09.00 am (CET).
Additional information on J.M. Huber Corp.
J. M. Huber Corporation is one of the largest, family-owned businesses in the United States. It was founded in 1883 by Joseph Maria Huber, an immigrant from Germany. Today, the company has a broad product portfolio ranging from specialty chemicals to the forestry sector. Huber employs about 4000 people in 20 countries, including about 700 employees in the silica business at six locations.
Evonik is a global leader in specialty chemicals, active in more than 100 countries world-wide. In its fiscal year 2015, more than 33.500 employees generated sales of about Euro 13.5 billion and an operative, adjusted EBITDA of about Euro 2.47 billion. Evonik has a leading position as a supplier of silica for tire manufacturers and the paint and coatings industry. Evonik’s silica products are also being applied as flow additives and carriers for the manufacture of foodstuffs, cosmetics, pharmaceuticals and silicones.
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.