MOSCOW (MRC) -- Ashland says it has agreed to acquire the personal care business of Schulke & Mayr GmbH for EUR262.5 million (USD317 million) in an all-cash deal, reported Chemweek.
Schulke & Mayr is owned by private equity firm EQT (Stockholm, Sweden). The deal will be financed with available cash and bank financing, and is expected to be immediately accretive to Ashland’s earnings.
The acquired business makes additives for personal care products, with a particular focus on preservatives. The deal bolsters Ashland’s efforts in its specialty additives business, and “is an excellent example of the type of bolt-on acquisition opportunities that will help advance our strategy and support the profitable growth of our core businesses,” says Ashland chairman and CEO Guillermo Novo.
The deal also improves Ashland’s environment, social, and governance (ESG) positioning in the personal and household care markets, the company says. “This acquisition further aligns our portfolio with the ‘clean beauty’ trend in the personal care industry and helps us solve for a new generation of consumers who are shifting to products with milder and safer ingredients,” Novo says. “Our combined biotechnology competencies further strengthen our ability to create new sustainable solutions in broader fields of application.”
One analyst estimates that Ashland paid an EBITDA multiple of about 11.3 times for the business. “We estimate an additional EUR83-96m in sales and EUR20–23m in EBITDA absent any synergies,” says Laurence Alexander, an analyst with Jefferies (New York, New York). The deal boosts personal care to about 26% of Ashland’s 2020 sales, Alexander adds.
Ashland appears likely to continue to pursue bolt-on acquisitions, according to Alexander. “The company has previously indicated that M&A activity will likely continue in the personal care, life sciences, and architectural coatings markets,” he notes.
Citi is Ashland’s financial advisor on the deal, with Squire Patton Boggs acting as legal advisor. The transaction is expected to close by 30 June 2021.
EQT acquired Schulke & Mayr from Air Liquide last year in a deal valued at up to EUR1 billion, subject to the results of an earn-out provision.
As MRC informed previously, on 3 September 2019, INEOS Enterprises announced the completion of the acquisition of the entire composites business from Ashland Global Holdings Inc. The acquisition also included a BDO facility in Germany. The businesses included in the transaction have combined sales of more than USD1.1 billion per year. They employ 1,250 employees across 19 sites in Europe, North and South America, Asia and Middle East.
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Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).
According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Ashland Global Holdings Inc. is global specialty chemicals company serving customers in a wide range of consumer and industrial markets, including adhesives, architectural coatings, automotive, construction, energy, food and beverage, nutraceuticals, personal care and pharmaceutical.