Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Online Exclusive
    • Latex
    • Technical Notebooks
    • Executive Action
    • Government/Legal
    • Opinion
    • Rubber Division IEC
    • ITEC
    • Blogs
    • Sustainability
    • Products
    • Wacky World of Rubber
  • War in Ukraine
  • Custom
    • Sponsored Content
    • White Papers
  • Resources
    • Directory
    • Classifieds & Mold Mart
  • Data
  • Events
    • RN Events
    • RN Livestreams/Webinars
    • Industry Events
    • Past Events
    • Rubber News M&A Live
    • 2022 Hose & Belt Manufacturers Conference
    • 2022 International Silicone Conference
    • 2022 International Tire Exhibition & Conference (ITEC)
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
May 20, 2016 02:00 AM

Evonik purchase bolsters additives business

Chris Sweeney
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    ESSEN, Germany—Evonik A.G. has acquired the Performance Materials Division of U.S.-based Air Products and Chemicals Inc. for $3.8 billion in a deal Evonik said boosts its additives business.

    Air Products said in a May 6 statement—the day the deal was announced—that the division produces specialty and coating additives and reported sales of about $1.07 billion and $241 million of adjusted EBITDA over the last 12 months ending March 31. It reported $244 million of adjusted EBITDA in fiscal 2015.

    Evonik said it projects savings of about $80 million both through cost synergies and revenue synergies, realized by 2020. It added that the transaction is structured as an asset deal, leading to tax benefits of more than $500 million.

    Air Products CEO Seifi Ghasemi said during a May 6 conference call he expects the transaction to close by the end of 2016.

    “Evonik is already one of the leading producers of specialty and coating additives,” Evonik CEO Klaus Engel said in a statement. “Air Products' specialty and coating additives business perfectly complements this fast-growing segment.

    “With this acquisition, we are expanding our portfolio with precisely the right markets, products and innovations and continuing to invest in our growth and profitability.”

    Epoxy curing agents accounted for about 40 percent of revenues, polyurethane additives about 32 percent and specialty additives about 28 percent. Air Products said the Performance Materials Division consists of about 1,100 employees with major production facilities in the U.S., Germany, United Kingdom, China and Japan.

    Evonik said the Performance Materials Division has 11 production and development locations worldwide.

    “Our Performance Materials Division that we are selling is a great business,” Ghasemi said during the call.

    “We've always said it was a great business because it has great margins. That is why Evonik is buying this business because it is a perfect fit for them. They are one of the world's leading specialty chemical companies. They're a great company with a very competent, forward-looking strategic management team.

    “The business that we have fits perfectly within their business and will have a great future in their business. I think the transaction is a win-win situation for both parties. We are very pleased that we have found an excellent home for our people to absorb this business and grow as it moves forward.”

    Air Products, in a separate transaction, is spinning off its $1 billion Electronic Materials Division, which produces materials for the semiconductor industry, into a newly formed company named Versum Materials.

    Ghasemi said the spinoff is expected to be completed in September.

    Both the Electronic Materials and Performance Materials Divisions made up Air Products' $2.09 billion Material Technologies Segment, which accounted for about 21 percent of the firm's total sales in 2015.

    Ghasemi said the transactions to break up this business will generate $4 billion after taxes, of which about $1.2 billion will be used to pay down debt with the remaining $2.8 billion for Air Products' Industrial Gasses business.

    The firm added that these moves will enhance its ability to invest and grow its core Industrial Gasses business, which accounted for the remaining 79 percent of sales in 2015.

    Air Products produces atmospheric and process gasses and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage.

    It reported $9.9 billion in sales for 2015, and it has 20,000 employees in 50 countries.

    “The transaction that we announced is totally consistent with our five-point strategic plan,” Ghasemi said. “The No. 1 point in that plan is we want to focus all of our process on industrial gas, and we intend to take action to separate ourselves from our non-core businesses. The transaction this morning goes a long way in accomplishing that goal.”

    Evonik said Air Products' business will be integrated rapidly into its nutrition and, care and resource efficiency segments.

    Its combined specialty and coating additives business has projected sales of about $4 billion.

    The newly acquired business is very complementary with Evonik's current products, the firm said. The combined business serves three primary markets—coating and adhesives additives, polyurethane foam additives and specialty surfactants for industrial and institutional cleaning.

    Evonik said it targets the same end customers as the acquired business, but with different and complementary products. Evonik provides PU foam stabilizers while Air Products is well positioned in PU foam catalysts.

    Evonik said demand for these products is increasing, with demand for the additives projected to grow more quickly than the overall demand for chemical products.

    The businesses also complement one another geographically. Evonik said Air Products' main focus is in North America and Asia, while Evonik is strong in Europe.

    The acquisition allows Evonik to boost its standing in the North American and Asian markets while reducing its dependence on Europe.

    Evonik is a Germany-based specialty chemicals producer with operations in more than 100 countries.

    It employs 33,500 with sales of $15.4 billion and operating profit of about $2.82 billion.

    Related Articles
    Evonik begins construction of silicone plant in China
    Evonik breaks ground on silicone plant in China
    Evonik acquires Air Products' coating additives business
    Evonik names deputy chairman
    J.J. Short Associates Inc.
    Vip Rubber & Plastics Co.
    Evonik receives grant from S.C. for $129.4 million project
    U.S. foam demand forecast to hit $25.2 billion
    Evonik closes in on U.S. plant; S.C. to provide aid for $129.4 million project
    Letter
    to the
    Editor

    Rubber News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    Most Popular
    1
    Updated: Conti fined for compound mixer explosion, shears accident
    2
    Kumho on road to zero with sustainable products, operations
    3
    Stakes high as global NR industry urgently seeks alternate supply
    4
    Birla Carbon raising prices on carbon black products
    5
    Denka requests weaker chloroprene classification, but EPA won't budge
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Online Exclusive
      • Latex
      • Technical Notebooks
      • Executive Action
      • Government/Legal
      • Opinion
      • Rubber Division IEC
      • ITEC
      • Blogs
        • Products
        • Wacky World of Rubber
      • Sustainability
    • War in Ukraine
    • Custom
      • Sponsored Content
      • White Papers
    • Resources
      • Directory
      • Classifieds & Mold Mart
    • Data
    • Events
      • RN Events
        • 2022 Hose & Belt Manufacturers Conference
        • 2022 International Silicone Conference
        • 2022 International Tire Exhibition & Conference (ITEC)
      • RN Livestreams/Webinars
      • Industry Events
      • Past Events
      • Rubber News M&A Live
    • Advertise
    • DIGITAL EDITION