Evonik to Buy Huber Silica Unit
In a deal valued at $630 million, Evonik Industries AG has agreed to purchase the silica business of U.S. firm J.M. Huber in an effort to expand its specialty chemicals business, the Essen, Germany-based company said in a Dec. 12 announcement.
Evonik, a leading global manufacturer of specialty chemicals, supplies silica for the paints and coatings industry as well as the tire industry and other sectors.
J.M. Huber, headquartered in Edison, NJ, currently employs a total of 4,000 workers, including 700 in its silica business, which occupies six locations.
Huber Silica, part of Huber Engineered Materials, offers a portfolio that includes additives for paints and coatings, including pigment extenders, gloss sheen control agents, rheology modifiers and matting agents.
Many of the company’s silica offerings, though, are oriented to consumer products like dental and pharmaceutical applications, whereas Evonik’s silica business has generally concentrated more on industrial application. Evonik’s coatings-related silica offerings include fumed silica, matting agents and silica nanocomposites.
“Huber Silica will be an outstanding reinforcement for our growth segment Resource Efficiency,” said Klaus Engel, chairman of Evonik's executive board.
“Combining the complementary silica businesses of Evonik and Huber will strengthen an important pillar of our portfolio,” explained Christian Kullmann, Executive Board member for Strategy at Evonik. “Also, Huber Silica is an excellent regional fit with its focus on the U.S., China and India.”
By the Numbers
Huber anticipates its silica business will achieve nearly $300 million in revenue in 2016, with earnings before interest, tax, depreciation and amortization (EBITDA) of $60 million.
Evonik expects the deal to generate synergies of $20 million, in relation to production, logistics and procurement, as well as harmonization of the product portfolio.
“Huber Silica will be an outstanding reinforcement for our growth segment Resource Efficiency,” said Klaus Engel, chairman of the Executive Board of Evonik.
“Silica has been part of Huber since the 1950s and paved the way for the company’s global expansion in engineered materials,” said Mike Marberry, president and CEO of Huber. “While it is difficult to part with a longstanding business, we expect Evonik to be an excellent fit for our Silica customers and our Silica employees.”
The sale of the silica unit will not affect Huber’s other business units, which include fire retardant additives and ground calcium carbonate, the company said in its statement.
Huber plans to invest the proceeds of the sale into its core engineered materials businesses in order to strengthen its portfolio of specialty products, Marberry added.
The acquisition, subject to requisite government review and approval, is expected to close in the second half of 2017, according to the companies.