Lanxess Will Acquire Chemtura

By Chemical Processing Staff

Sep 23, 2016

Specialty chemicals company Lanxess plans to acquire US-based Chemtura Corporation, a global providers of flame retardant and lubricant additives. This will be the largest acquisition in the company’s history, according to Lanxess.

The companies have reportedly signed a definitive acquisition agreement. Under the terms of the agreement, Chemtura shareholders will receive $33.50 per share in cash for each outstanding share of common stock held, which represents a 18.9% premium to the stock’s closing share price of $28.18 on September 23, 2016, according to Lanxess. The transaction with an enterprise value of approximately EUR 2.4 billion will be financed by Lanxess mainly through senior and hybrid bonds, and existing liquidity. The transaction, which is expected to close around mid-2017, is subject to approval by Chemtura shareholders, required regulatory approvals and certain other customary closing conditions.

Headquartered in Philadelphia, Pennsylvania, Chemtura reportedly has 20 sites in 11 countries and approximately 2,500 employees worldwide. The company reported sales of around EUR 1.5 billion in the last four quarters with EBITDA pre exceptionals of approximately EUR 245 million (EBITDA margin of approx. 16%), according to Lanxess. Approximately 45% of Chemtura’s revenue is generated in North America. In addition to additives, Chemtura’s portfolio includes urethanes and organometallics.

For Lanxess, the acquisition of Chemtura will be accretive to earnings per share (EPS) in the first fiscal year, with annual synergies of approximately EUR 100 million expected by 2020, according to the company. Lanxess is paying an EV/EBITDA multiple of approximately 7x including synergies for this transaction, meeting its target of 7-9x for acquisitions including synergies.

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