LANXESS and Advent International establish a leading global joint venture for high-performance engineering polymers
Ad hoc according to Art. 17 paragraph 1 MMVO
- LANXESS transfers High-Performance Materials business into joint venture
- LANXESS High Performance Materials business valued at EUR 2.5 billion.
- LANXESS receives a payment of at least EUR 1.1 billion at closing and a stake of up to 40 percent in the joint venture
- LANXESS and Advent to acquire Engineering Materials business from DSM for a purchase price of around EUR 3.7 billion financed by Advent. This business will also be contributed to the new joint venture
- Substantial synergies expected
- LANXESS to use proceeds for debt reduction and share buy back
- New joint venture with pioneering product portfolio and integrated value chain
CologneMay 31, 2022
Specialty chemicals company LANXESS and Advent International (“Advent”) are establishing a joint venture for engineering and high-performance polymers.
LANXESS contributes its High Performance Materials (HPM) business unit which is valued at EUR 2.5 billion to the joint venture and will receive an initial payment of at least EUR 1.1 billion and a share of up to 40 percent in the future joint venture. Advent will hold at least 60 percent of the joint venture. LANXESS plans to use the proceeds for debt reduction and for a share buy-back in the amount of up to EUR 300 million.
LANXESS will have the possibility to divest the remaining stake in the joint venture to Advent earliest after three years. An earnings-related multiplier (EBITDA multiple) has already been agreed for its valuation. The EBITDA could then be significantly higher than today, as Advent and LANXESS anticipate substantial synergies resulting from the combination of the two businesses by 2026.
At the same time LANXESS and Advent signed an agreement to acquire the Engineering Materials business (DEM) from Dutch group Royal DSM, which will become part of the new joint venture. The purchase price is around EUR 3.7 billion and will be financed by the joint venture via equity from Advent and external debt. The business represents sales of around EUR 1.5 billion with an EBITDA margin of approximately 20 percent. DEM is one of the leading global suppliers high performance specialty materials that address key market needs in electronics, electrical and consumer goods.
The transaction is still subject to approval by the relevant authorities. Closing is expected in the first half of 2023.
LANXESS contributes its High Performance Materials (HPM) business unit which is valued at EUR 2.5 billion to the joint venture and will receive an initial payment of at least EUR 1.1 billion and a share of up to 40 percent in the future joint venture. Advent will hold at least 60 percent of the joint venture. LANXESS plans to use the proceeds for debt reduction and for a share buy-back in the amount of up to EUR 300 million.
LANXESS will have the possibility to divest the remaining stake in the joint venture to Advent earliest after three years. An earnings-related multiplier (EBITDA multiple) has already been agreed for its valuation. The EBITDA could then be significantly higher than today, as Advent and LANXESS anticipate substantial synergies resulting from the combination of the two businesses by 2026.
At the same time LANXESS and Advent signed an agreement to acquire the Engineering Materials business (DEM) from Dutch group Royal DSM, which will become part of the new joint venture. The purchase price is around EUR 3.7 billion and will be financed by the joint venture via equity from Advent and external debt. The business represents sales of around EUR 1.5 billion with an EBITDA margin of approximately 20 percent. DEM is one of the leading global suppliers high performance specialty materials that address key market needs in electronics, electrical and consumer goods.
The transaction is still subject to approval by the relevant authorities. Closing is expected in the first half of 2023.
LANXESS is a leading specialty chemicals company with sales of EUR 6.7 billion in 2023. The company currently has about 12,400 employees in 32 countries. The core business of LANXESS is the development, manufacturing and marketing of chemical intermediates, additives and consumer protection products. LANXESS has achieved leading positions in the Dow Jones Sustainability Index and the MSCI ESG and ISS ESG ratings, among others, for its commitment to sustainability.
This company release contains certain forward-looking statements, including assumptions, opinions, expectations and views of the company or cited from third party sources. Various known and unknown risks, uncertainties and other factors could cause the actual results, financial position, development or performance of LANXESS AG to differ materially from the estimations expressed or implied herein. LANXESS AG does not guarantee that the assumptions underlying such forward-looking statements are free from errors, nor does it accept any responsibility for the future accuracy of the opinions expressed in this presentation or the actual occurrence of the forecast developments. No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, any information, estimates, targets and opinions contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and accordingly, no representative of LANXESS AG or any of its affiliated companies or any of such person's officers, directors or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.
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