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Specialty Chemical Company Completes Acquisition

Friday, September 24, 2021

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Completing the second-largest acquisition in its history, German specialty chemicals company Lanxess recently announced its procurement of Emerald Kalama Chemical after receiving all required regulatory approvals.

According to Lanxess, the United States-based specialty chemicals manufacturer was majority-owned by affiliates of private equity firm American Securities LLC.

The enterprise value of Emerald Kalama Chemical was $1.075 billion; however, after deducting liabilities, the purchase price was approximately $1.04 billion, which Lanxess financed from existing liquidity.

In 2020, Emerald Kalama Chemical achieved global sales of approximately $425 million and EBITDA pre-exceptionals of around $90 million. Within three years, Lanxess expects an additional annual EBITDA contribution of around $30 million from synergy effects, as the acquisition will already be earnings per share accretive in the first fiscal year after its completion.


Completing the second-largest acquisition in its history, German specialty chemicals company Lanxess recently announced its procurement of Emerald Kalama Chemical after receiving all required regulatory approvals.

“Emerald Kalama Chemical gives us another major boost on our growth path. The new businesses are an optimal strategic fit for us,” said Matthias Zachert, Chairman of the Board of Management of Lanxess AG.

“We are strengthening our position in markets with attractive growth rates and opening up new high-margin application areas, especially in the beverage and food sector or in cleaning and cosmetic products.

“What's more, Emerald Kalama Chemical is perfectly backward integrated—strengthening our value chain in Consumer Protection. This segment is thus an important engine on the way to making Lanxess even more stable and profitable. A strong team is now working at full speed to ensure a rapid integration.”

In closing the transaction, Lanxess will gain about 470 employees and three production sites in Kalama, Washington, Rotterdam, the Netherlands and Widnes, Great Britain.

According to the company, roughly a quarter of the sales of the acquired businesses are accounted for by specialty chemicals for high-growth industrial applications, primarily in the plastics, paints and coatings and adhesives industries. The products will be integrated into the Polymer Additives business unit.

Prior Acquisitions

Back in 2017, a $2.69 billion deal between Lanxess and U.S.-based Chemtura Corp. was moving forward after Chemtura shareholders approved the merger.

At the time, Chemtura had 20 sites in 11 countries and approximately 2,500 employees worldwide. The company posted sales of $1.7 billion in 2015.

Flame retardant and lubricant additives were “the main pillars of Chemtura’s business and would complement the current Lanxess portfolio,” Lanxess officials reported. After closing of the transaction, the two business activities were to be be integrated with Lanxess’ Rhein Chemie Additives business unit to form a new segment.

Rhein Chemie Additives supplies a broad range of special additives and service products for the manufacture of plastics, rubber, lubricants and coatings. It employs some 1,600 people at more than 20 sites around the world.

In addition to the additives, Chemtura’s portfolio also includes urethanes and organometallics, which were slated to be integrated into Lanxess’ portfolio as well.

Lanxess said the transaction, first announced in September 2016, would make it a major player in the field of additives chemistry and increase the company’s footprint in North America.

The companies expected the deal to close in mid-2017, after remaining regulatory approvals were obtained. Clearance for the acquisition from the U.S. antitrust authorities was received at the end of December 2016.


Tagged categories: Acquisitions; Asia Pacific; Business conditions; Business management; Business matters; Business operations; Construction chemicals; EMEA (Europe, Middle East and Africa); Lanxess Corp.; Latin America; North America; Program/Project Management; Z-Continents

Comment from NASEER vohra, (9/26/2021, 8:26 AM)


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