Sector News

Evonik to acquire PeroxyChem for $625 million

November 8, 2018
Chemical Value Chain

Evonik Industries says that it has signed an agreement with One Equity Partners to acquire PeroxyChem (Philadelphia, Pennsylvania) for $625 million. PeroxyChem is a manufacturer of hydrogen peroxide (H2O2) and peracetic acid (PAA). The company employs approximately 600 people, with eight production sites located mainly in North America, but also including Germany, Spain, and Thailand.

H2O2 and PAA acid are both oxidants that are used in a number of applications, such as a bleaching agent in the pulp industry, as a disinfectant for food processing, or for wastewater treatment. H2O2 is very environmentally friendly, as water is the only byproduct following its use. Hydrogen peroxide is increasingly used in attractive high-tech applications such as production of semiconductors, medical applications, and spacecraft technology. The H2O2 and PAA markets are characterized by an average annual growth rate of about 6%, according to Evonik.

“PeroxyChem will significantly strengthen our growth segment resource efficiency,” says Christian Kullmann, chairman of the executive board at Evonik. “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,” Kullmann says.

PeroxyChem expects to earn revenues of approximately $300 million and an adjusted EBITDA of about $60 million in the 2018 fiscal year. The purchase price (enterprise value), including synergies, is about 7.8 times the annual adjusted EBITDA, or 10.4 times before synergies, Evonik says. The transaction is scheduled to be completed by mid-2019, subject to approval by the appropriate authorities.

Evonik says that it expects synergies across the combined global business of $20 million due to the complementary fit in operations, logistics, expansion of the product portfolio, and the launch of new technology. Synergies should be fully realized by 2022, according to Evonik.

“PeroxyChem is highly profitable. With an adjusted EBITDA margin of about 20%, profitability is constantly above Evonik’s current group margin,” says Ute Wolf, CFO, Evonik. “As a strong-growing and stable financing business, it also generates an attractive free cash flow,” she says.

By Michael Ravenscroft

Source: Chemical Week

comments closed

Related News

January 29, 2023

Dow and 3M cut thousands of jobs

Chemical Value Chain

3M and Dow have announced they are cutting thousands of roles from their global workforces in response to economic pressures. Dow has said it will cut 2,000 jobs across its global workforce (around 5%) in a bid to save US$1bn in 2023. The company says it will also cut costs by shutting down “select assets”, though it did not note where it would halt operations.

January 29, 2023

Sweden discovers Europe’s largest rare earths deposit

Chemical Value Chain

Sweden’s state mining firm has discovered what could be Europe’s largest rare earths deposit, and says it could help the bloc reduce its reliance on imports of minerals needed to manufacture clean technologies and meet climate targets.

January 29, 2023

Avantium to supply Henkel with plant-based FDCA

Chemical Value Chain

Henkel and Avantium have been partners since 2019, when Henkel joined the PEFerence consortium. This consortium of partners, coordinated by Avantium, aims to establish an innovative supply chain for FDCA and PEF (polyethylene furanoate).

How can we help you?

We're easy to reach