Lanxess : Global joint venture for high-perfo...

Global joint venture for high-performance engineering polymers

(Source: Lanxess)
(Source: Lanxess)

Specialty chemicals company Lanxess and private equity investor Advent International Corp., Boston, MA/USA, are establishing a joint venture (JV) for high-performance engineering polymers. The 2 companies have signed an agreement to acquire the DSM Engineering Materials business from Dutch group Royal DSM NV, Heelen, which will become part of the new JV.  
The purchase price is around €3.7 billion and will be financed by the JV through equity from Advent and external debt. The business represents sales of around €1.5 billion with an EBITDA margin of approx. 20%.  
One of the leading global suppliers in high-performance specialty materials that address key market needs in electronics, electrical and consumer goods, DSM’s Engineering Materials business comprises polyamides (PA 6, PA 66) as well as various specialty materials (PA 46, PA 410 and specialty polyesters as well as PPS). Around 2,100 employees work for the division at 8 production and 7 research sites in all relevant markets worldwide. In addition to Europe and the USA, the business has a particularly strong presence in Asia.  
Lanxess Deutschland GmbH, Cologne/Germany, will contribute its High Performance Materials business unit (BU) to the JV. The BU is one of the leading suppliers of high-performance polymers, which are used primarily in the automotive industry. The business represents annual sales of around €1.5 billion with EBITDA pre exceptionals of around €210 million.  
Advent will hold at least 60% in JV. Lanxess will receive an initial payment of at least €1.1 billion and a stake of up to 40% in the future JV. This move further sharpens Lanxess’ business portfolio, which will consist of 3 specialty chemicals segments once the transaction is completed. Closing is expected in the first half of 2023.

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