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Arkema agrees USD 570mn crop deal with ArrMaz
Posted on Thursday, 16 May 2019 12:00
French speciality chemicals company Arkema has agreed to acquire a global leader in surfactants for crop nutrition, mining and infrastructure ArrMaz from Golden Gate Capital for USD 570.00 million.
The deal combines complementary expertise in formulations, technologies and geographic reach and is said to be part of the acquiror’s long-term growth strategy to achieve over 80.0 per cent of sales in specialities by 2023.
ArrMaz will be integrated into Arkema’s performance additives unit, which is one of the company’s three main pillars to drive growth of its high-performance materials division.
The buyer noted that the acquisition marks another milestone in its expansion path, bringing in USD 290.00 million in sales, an 18.0 per cent earnings before interest, taxes, depreciation and amortisation (EBITDA) margin and around 2.5 per cent of capax to sales, which the target generates annually.
Arkema observed that ArrMaz’s organic growth profile and well-identified collaborations – expected to amount to around USD 15.00 million by 2023 – attracted it to buy the company.
The deal represents an enterprise value to EBTIDA multiple of 10.8x and is expected to complete during the summer following the relevant antirust authority approvals.
ArrMaz partners with the mining, crop nutrients, asphalt paving and other growing industries, providing chemical process aids and additives to help improve the customer’s products and processes.
Golden Gate took over the company in 2012 for USD 500.00 million.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 152 deals targeting the other chemical product and preparation manufacturing industry announced worldwide since the start of 2019.
The largest of these, by far and away, involves Merck agreeing to acquire Versum Materials of the US for USD 6.50 billion.
Haldor Topsoe of Denmark, the US-based speciality fluids business of Cabot and China’s Jiangxi Guotai Industrial Explosive Material Group, among others, have also been targeted in deals this year.
© Zephus Ltd