LANXESS completes acquisition of Emerald Kalama Chemical

LANXESS has completed the acquisition of Emerald Kalama Chemical after receiving all the required regulatory approvals. The enterprise value of Emerald Kalama Chemical was $1.075 billion (EUR 900 million). After deducting liabilities, the purchase price was approximately $1.04 billion (EUR 870 million), which LANXESS financed from existing liquidity, a company statement notified.

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

With the closing of the transaction, LANXESS grows by around 470 employees and the three production sites in Kalama/Washington (USA), Rotterdam (Netherlands) and Widnes (Great Britain), added the statement.

It also said that in 2020, Emerald Kalama Chemical achieved global sales of approximately $425 million (EUR 375 million) and EBITDA pre exceptionals of around $90 million (EUR 80 million). Within three years, LANXESS expects an additional annual EBITDA contribution of around $30 million (EUR 25 million) from synergy effects. The acquisition will already be earnings per share accretive in the first fiscal year after its completion.

The statement mentioned that the acquisition makes LANXESS one of the leading providers of products for flavours and fragrances – an area in which the specialty chemicals company expects to see sustained strong growth rates. The substances are used primarily in personal care products, health care supplies, cosmetics and exclusive fragrances, as well as food and beverages. The product range in the new LANXESS portfolio includes more than 30 aroma chemicals that provide earthy, floral, fruity, spicy and herbal notes.

“LANXESS is incorporating this business into the newly established Flavours & Fragrances business unit, which will become part of the consumer protection segment,” it informed.

It further said that the acquisition also strengthens LANXESS’ position in the preservatives business. The new products will be used in high-growth applications in the food and beverage industry as well as in detergents, fabric softeners, cosmetics and personal care products.

Around 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, the statement pointed out.