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February 16, 2021 10:52 AM

Lanxess to acquire Emerald Kalama

Rubber & Plastics News Staff
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    Thorsten Martin, Lanxess

    COLOGNE, Germany—Lanxess A.G. has signed a $1 billion agreement to acquire Emerald Kalama Chemical L.L.C., a global manufacturer of specialty chemicals. The cash acquisition should be finalized at some point in the second half of 2021, Lanxess said in a news release

    The move strategically will strengthen Lanxess' portfolio, particularly with antimicrobial active ingredients and preservatives for products such as animal hygiene and disinfectants effective against the coronavirus and African swine fever.

    Kalama, Wash.-based Emerald Kalama generates about 75 percent of its turnover from specialty chemicals for consumer items such as preservatives for food, household and cosmetic applications, flavors and fragrances, and products for animal nutrition. The remaining 25 percent of its business comes from products for industrial uses such as adhesives, plastics and applications in the rubber industry.

    "The businesses of Emerald Kalama Chemical are an ideal fit for us," Matthias Zachert, chairman of the Board of Management of Lanxess, said in a statement. "We will further strengthen our Consumer Protection segment and open up new application areas with strong margins, for example in the food industry and animal health sector."

    The acquisition of Emerald Kalama, which posted sales of about $425 million and EBITA pre-exceptionals of $90 million last year, helps to lay a foundation for Lanxess' growth in North America. Lanxess said it expects to see an annual EBITDA contribution of $30 million from the acquisition, with the earnings per share accretive in the first year fiscal year after it has taken full ownership of Emerald Kalama.

    "We are gaining further momentum on our growth course … this will make us even more profitable and stable," Zachert said. "Emerald Kalama Chemical has a very efficient setup, bundling all its production activities at only three sites. That is why we expect to integrate the new business very quickly."

    Emerald Kalama Chemical employs about 500 worldwide, operating sites in Kalama; Rotterdam, Netherlands; and Widnes, England.

    Cologne-based Lanxess, which saw sales of about $6 billion in 2019, operates in 33 countries and employs about 14,400 globally. The heart of its business is the development of chemical intermediates, additives, specialty chemicals and plastics.

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