8 November 2018
DETAILS
VIEW FULL ACQUISITION PRESENTATION
Evonik acquires PeroxyChem for US$625 million
• Strengthening of growth segment Resource Efficiency
• Expansion of high-margin specialty applications
for hydrogen peroxide
• Strong-growth and stable financing business
with attractive free cash flow generation
Evonik Industries AG has signed an agreement with
One Equity Partners
to acquire US-based PeroxyChem for US$625 million.
PeroxyChem is a manufacturer of
hydrogen peroxide (H2O2) and
peracetic acid (PAA)
and is well positioned in high-margin specialty applications.
The H2O2 and PAA markets are characterized
by versatile applications and above-average growth rates -
especially for specialty applications
with average annual market growth of around 6 percent.
H2O2 and PAA acid are both oxidants
with multiple application fields, whether
as a bleaching agent in the pulp industry,
as a disinfectant for food processing
or for wastewater treatment.
Water is the only byproduct following the reaction of H2O2
which makes its use highly environmentally friendly.
Thanks to its product properties, hydrogen peroxide
is increasingly used in attractive high-tech applications
such as semiconductor manufacturing medical applications
and spacecraft technology.
Logistics, long-term customer relationships
and diverse end-use applications make the business resilient.
PeroxyChem leverages its H2O2 and PAA to focus on
sophisticated, less cyclical markets in
the environmental, food safety
and electronics semiconductor industries.
The USbased company already generates
approximately three-quarters of its earnings
with specialty applications in these segments.
PeroxyChem, with roots going back over 100 years,
is an innovative producer of H2O2 and PAA.
The company is headquartered
in Philadelphia, Pennsylvania,
and employs approximately 600 people worldwide
with eight production sites
located mainly in North America
but also Germany, Spain and Thailand.
Evonik with its Business Line Active Oxygens
also has decades of experience
in the production of hydrogen peroxide and related products.
With 13 production facilities across the globe,
the company is one of the world’s largest producers.
Christian Kullmann,
Chairman of the Executive Board of Evonik
"PeroxyChem will significantly strengthen
our growth segment Resource Efficiency,"
"We are expanding our portfolio of environmentally friendly
and high-growth specialty applications.
Furthermore, we are getting an attractive business
characterized by above-average growth,
moderate capital intensity and low cyclicality."
Bruce Lerner,
President and CEO of PeroxyChem
"We are excited about the opportunity to join forces with Evonik
and make our successful business even stronger.
The complementary fit of the two businesses
will unlock new and attractive growth opportunities
for our customers and employees“.
Ute Wolf,
Chief Financial Officer of Evonik
"PeroxyChem is highly profitable.
With an adjusted EBITDA margin of about 20 percent,
profitability is constantly
above Evonik’s current group margin.”
"As a strong-growing and stable financing business,
it also generates an attractive free cash flow."
PeroxyChem expects
revenues of approximately US$300 million and
an adjusted EBITDA of around US$60 million
for the 2018 fiscal year.
This corresponds to
an attractive EBITDA margin of around 20 percent.
Evonik expects synergies across
the combined global business of US$20 million
due to the complementary fit in
operations, logistics, expansion of the product portfolio
and launch of new technologies.
Synergies should be fully realized by 2022.
The purchase price (enterprise value) including synergies is
about 7.8 times the annual adjusted EBITDA,
or 10.4 times before synergies.
The transaction is scheduled to be completed by mid2019,
subject to approval by the appropriate authorities.
The acquisition is likely to have a positive impact on
Evonik’s adjusted earnings per share and free cash flow
as early as the first full year after closing.
Financing has been secured via
cash and committed credit facilities.
Evonik Industries AG
Rellinghauser Straße 1-11
45128 Essen
Germany
Phone +49 201 177-01
Fax +49 201 177-3475
www.evonik.com
Matthias Ruch
Head of External Communications
Phone +49 201 177 3348
Mobile +49 174 325 9942
Matthias.Ruch@evonik.com
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