Chemicals company Evonik (Essen, Germany) announced today that it has signed an agreement to sell its methacrylates business to Advent International (Boston) for €3 billion ($3.4 billion). The selling price is 8.5 times the business’ EBITDA. The transaction is subject to approval by the authorities in several countries and is expected to close in the third quarter of this year.
The methacrylates business has 18 production sites and 3,900 employees worldwide. From 2016 to 2018, the business generated an average annual EBITDA of about €350 million ($397 million) and sales of about €1.8 billion ($2 billion) per year. Evonik expects sales and EBITDA to be at a similar level in 2019.
The transaction comprises the methacrylates, acrylic products and CyPlus business lines, and some of the methacrylate resins activities. Evonik said that it put these operations on the market as part of its systematic strategy of sharpening its focus on specialty chemicals, which is a less cyclical business. Private equity company Advent International is one of the most experienced financial investors in the chemical industry in the world, with more than 30 investments over three decades, according to Evonik’s press release.
The net purchase price (equity value) can be calculated after deductions, made up primarily of pension obligations of around €500 million. Evonik will use the sale proceeds to strengthen its balance sheet and, above all, for targeted growth projects. That includes funding the purchase price of U.S.-based PeroxyChem, which Evonik plans to close this year. In addition, some funds will be used to strengthen the present specialty chemicals portfolio, for example, by building a new polyamide 12 plant in Marl, Germany.