Private Equity Company Takes over Plexiglas Brand
Evonik Sells Methacrylates to Advent International
Evonik AG, Essen, Germany, signed an agreement to sell its Methacrylates business to Advent International plc., London, UK, for EUR 3 billion. The selling price (enterprise value) is 8.5 times the business’ EBITDA. The transaction is subject to approval by the authorities in several countries and is expected to close in the third quarter of this year.
The Methacrylates business has 18 production sites and 3900 employees worldwide. From 2016 to 2018, the business generated an average annual EBITDA of about EUR350 million and sales of about EUR1.8 billion per year. For 2019 Evonik expects sales and EBITDA at a similar level.
German Group Focuses on Specialty Chemicals
The transaction comprises the Methacrylates, which also includes the PMMA brand Plexiglas, Acrylic Products and CyPlus business lines, and some of the methacrylate resins activities. Evonik put these operations on the market as part of its systematic strategy of sharpening its focus on specialty chemicals, which are less cyclical. Private equity company Advent International is one of the most experienced financial investors in the chemical industry in the world, with more than 30 investments over three decades.
The net purchase price (equity value) can be calculated after deductions, made up primarily of pension obligations of around EUR 500 million. Evonik will use the sale proceeds to strengthen its balance sheet and, above all, for targeted growth projects. That includes funding the purchase price of the US company PeroxyChem, which Evonik plans to close this year.
In addition, some funds will be used to strengthen the present specialty chemicals portfolio, for example, by building a new polyamide 12 plant in Marl, Germany. These businesses generate an attractive margin and an above-average cash flow. Also in 2019 and even without the contribution from the Methacrylates business, Evonik will be able to cover the dividend payment out of its strong free cash flow.
Evonik Industries AG
Would you like to subscribe to our Newsletters on plastics technology and profit from the latest information?
Looking for a new challenge? Check out our jobs market!
Patents encourage innovation: Stay on the ball with the latest innovations in the plastics industry in our patents section.