Evonik sells Methacrylates business
Published by Callum O'Reilly,
Senior Editor
Hydrocarbon Engineering,
Evonik has signed an agreement to sell its Methacrylates business to Advent International for €3 billion.
The selling price (enterprise value) 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 3Q19.
The Methacrylates business has 18 production sites and 3900 employees worldwide. From 2016 to 2018, the business generated an average annual EBITDA of about €350 million and sales of about €1.8 billion per year. For 2019, Evonik expects sales and EBITDA at a similar level.
The transaction comprises the Methacrylates, Acrylic Products and CyPlus business lines, and some of the methacrylate resins activities. Evonik put these operations on the market as part of its systematic strategy of sharpening its focus on specialty chemicals, which are less cyclical.
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 for targeted growth projects, including funding the purchase price of the US company PeroxyChem, which Evonik plans to close this year. Some funds will also be used to strengthen the present specialty chemicals portfolio, e.g. by building a new polyamide 12 plant in Marl, Germany. These businesses generate an attractive margin and an above-average cash flow.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/11032019/evonik-sells-methacrylates-business/
You might also like
Hydrocarbon Engineering Podcast
In this episode, Alan Gelder, Senior Vice President of Refining, Chemicals and Oil Markets at Wood Mackenzie, provides a review of downstream markets in 2024 and looks ahead to what 2025 may hold for the sector.
ONEOK announces joint ventures for export terminal
ONEOK has announced joint ventures with MPLX to build an LPG export terminal at a premier location on US Gulf Coast.