Sector News

Lanxess to acquire IFF’s microbial control business 

August 29, 2021
Chemical Value Chain

Lanxess AG (Cologne, Germany) intends to take over the microbial control business of the U.S. group International Flavors & Fragrances Inc. (IFF). Both companies signed a corresponding agreement on August 23, 2021. IFF Microbial Control is one of the leading suppliers of antimicrobial active ingredients and formulations for material protection, preservatives and disinfectants. The products are used in a wide range of applications, particularly in personal care and household products, industrial water treatment as well as paints and coatings.

The transaction is still subject to approval by the relevant antitrust authorities. In addition, the business must first be carved out from the IFF Group. LANXESS therefore expects the transaction to be completed in the second quarter of 2022.

The IFF microbial control business represents sales of around $450 million and EBITDA of approximately $100 million. Within four years after the closing of the transaction, LANXESS expects synergies to add approximately $35 million (EUR 30 million) in EBITDA. The acquisition is expected to be earnings per share accretive already in the first fiscal year after closing.

“In 2021, all signs are pointing to growth. The acquisition of IFF Microbial Control is already the fourth this year and LANXESS’ second largest ever. The business fits ideally into our strategic direction – specialty chemicals with attractive margins, applications in a wide range of industries and with a global positioning. It will make LANXESS one of the world’s largest suppliers of microbial control products. At the same time, we are enhancing Consumer Protection to become the strongest segment in the Group and are once again taking LANXESS a decisive step forward in terms of profitability and stability,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.

LANXESS will pay around $1.3 billion (EUR 1.1 billion) for the acquisition. “Taking into account the synergies we are aiming for, we are achieving an attractive purchase price of 9.6 times EBITDA,” said LANXESS CFO Michael Pontzen. The Group will finance the purchase price with debt capital and has secured respective bridge financing for this purpose. Pontzen: “We will replace the bridge financing agreed with our banks in the coming months by placing corporate bonds in the capital market. In doing so, maintaining our solid investment grade rating is of great importance to us.”

IFF Microbial Control employs around 270 people and operates two production facilities at its U.S. sites in St. Charles, Louisiana, and Institute, West Virginia. The business also maintains a large partner network with active ingredient manufacturers and formulators. Following completion of the acquisition, the business is to be integrated into LANXESS’ Material Protection Products business unit.

“Also thanks to acquisitions in recent years, we are already well positioned as microbial control solutions provider. With IFF’s microbial control business, we can now expand our portfolio of active ingredients, enabling us to offer our customers additional application-oriented solutions. In addition, we are strengthening our value chain,” said Michael Schäfer, head of the Material Protection Products business unit. “The business also gives us access to new technologies and enhances our regulatory position through additional registrations.”

IFF Microbial Control offers a comprehensive portfolio of innovative and sustainable solutions. The products extend the life and ensure the functionality of end products, for example in paints and coatings, personal care products, detergents and household cleaners. They also preserve water in industrial applications. Hygiene solutions from IFF Microbial Control are also used in functional textiles. They ensure that these remain germ-free for a longer time.

by Mary Page Bailey

Source: chemengonline.com

comments closed

Related News

September 12, 2021

Johnson Matthey announces new Hydrogen Technology business

Chemical Value Chain

The new Hydrogen Technologies business will be headed up by Ralph Calmes, who has been appointed Managing Director Hydrogen Technologies. Ralph, who previously led JM’s Platinum Group Metal Services business, will take up this role effective 1 October with both Eugene McKenna (Green Hydrogen) and Jo Godden (Fuel Cells) reporting directly to him. Ralph will report to Group Chief Executive Robert Macleod.

September 12, 2021

CEO Stefan Doboczky will not extend contract and will step down at end of third quarter 2021

Chemical Value Chain

The Supervisory Board of Lenzing AG, the world’s leading producer of wood-based cellulosic fibers, has come to a mutual agreement with its longstanding Chief Executive Officer Stefan Doboczky to end his contract.

September 12, 2021

Europe’s plastics industry calls for mandatory EU recycled content target for plastics packaging of 30% by 2030

Chemical Value Chain

PlasticsEurope says that Europe’s plastics producers support the European Commission’s previously announced proposal for a mandatory EU recycled content target for plastics packaging, as defined in the Commission’s Packaging and Packaging Waste Directive (PPWD). This target should be 30% for plastics packaging by 2030, PlasticsEurope says.

Send this to a friend