Clariant to acquire Süd-Chemie AG

Clariant is bidding to acquire Süd-Chemie AG in €2.0 billion ($2.67 billion) deal with a particular interest in the German chemical company's catalyst and adsorbents businesses. In a presentation to analysts, Clariant called the catalyst and adsorbent units "attractive, high margin businesses" that provide "future technologies with high long-term growth potential." On Feb. 16, Süd Chemie's shares closed up 2.32% to €127.90 ($170.94). Clariant shares, meanwhile, fell 13.0% to CHF15.19 ($15.22).

Clariant said that the acquisition, which is expected to close in April, would expand expands its exposure to global megatrends; strengthen technology, R&D, and innovation capabilities; and contribute high quality of earnings. Clariant noted that Süd Chemie's catalyst business has enjoyed a compound average growth rate in sales of 6.5% from 2005-2010, with 2010 EBITDA (earning before income taxes, depreciation, and amortization) margin of 18.2%. Adsorbents, used in food, plastic additives, and water-based suspensions, have seen compound average growth in sales over the last five years of 7.1%, with an EBITDA margin of 13.5%.

Süd-Chemie will be integrated into Clariant's decentralized organization structure as separate business units. The company has approximately 6500 employees in 40 countries. It generates 40% of its sales in Europe, followed by Asia Pacific/Middle East (32%), Americas (20%), and Africa (8%).

Clariant has reached an agreement with the majority shareholder, One Equity Partners, which has a 50.4% stake in Süd Chemie, as well as the family shareholders, who hold a roughly 46% share. In the deal, Clariant will acquire around 95% of the outstanding shares, paying One Equity Partners €121 ($161) per Süd-Chemie share. The company said the majority of the Süd-Chemie family shareholders will swap their shares into Clariant shares at a ratio of 1:8.84.

Clariant, which is headquartered in Muttenz near Basel, Switzerland, has operations on five continents with more than 100 group companies. It employs approximately 17,500 and had sales of CHF6.6 billion ($6.613 billion) in 2009.

Clariant reported its fourth quarter and full-year 2010 results on the same day it announced the Süd Chemie deal, with net income of CHF191 million, up from a net loss of CHF194 million in 2009. The company said its two-year restructuring program was now complete, with 2010 sales of CHF7.120 billion, compared to 2009's CHF6.614 billion.