M&As: Element Solutions acquires chemical developer HSO; HB Fuller buys UK liquid adhesive firm Apollo

US speciality chemicals firm Element Solutions Inc says that it has acquired HSO Herbert Schmidt GmbH & Co. KG, a privately-held, multi-national developer of surface finishing technology and chemistry headquartered in Solingen, Germany. Terms were not disclosed.

Founded in 1936, HSO develops and manufactures highly-specialized solutions for decorative and functional surface finishing with a focus on environmentally sustainable products, especially in the field of plating on plastics. In 2021, HSO was certified as a climate-neutral electroplating operation functioning under the values of sustainability and climate protection. Future results from this tuck-in acquisition will be reported in the Company’s Industrial & Specialty segment.

Element Solutions Inc supplies a broad range of solutions that enhance the performance of products people use every day. Developed in multi-step technological processes, these innovative solutions enable customers' manufacturing processes in several key industries, including consumer electronics, power electronics, semiconductor fabrication, communications and data storage infrastructure, automotive systems, industrial surface finishing, consumer packaging and offshore energy.

In other news, adhesives supplier H.B. Fuller Company says it has finalised its purchase of Apollo, the UK’s largest independent manufacturer of liquid adhesives, coatings and primers for the roofing, industrial and construction markets. Based in Tamworth, UK, Apollo is projected to have 2022 revenue of approximately £42 million and EBITDA of approximately £11 million.

Apollo will operate within H.B. Fuller’s existing Construction Adhesives and Engineering Adhesives business units, and is expected to enhance H.B. Fuller’s position in key high-value, high-margin markets in the UK and Europe.

Apollo manufactures and sells a diverse range of commercial roofing, construction, and adhesives solutions. Apollo complements H.B. Fuller’s Construction adhesives businesses in Europe and its recent addition in early January 2022 of Fourny nv in Belgium, which had 2021 sales of EUR8 million and EBITDA of EUR2.1 million.

The addition of this business will expand the company’s share in key construction markets in the UK and across Europe and enable global expansion of its leading position in the roofing industry. Apollo’s roofing technology includes a range of insulation and membrane adhesives, and roof and waterproofing primers. The construction solutions business supplies liquid adhesive, sealants, and resin to construction markets, which are used to bond or repair building materials in homes, on construction sites and in factories, replacing traditional adhesives, such as cements, wood glues, or traditional fasteners. The industrial adhesive solutions business will enhance H.B. Fuller’s Engineering Adhesives’ transportation product line with high-performance applications for panel laminations in caravans and motor homes, PVC door panels, insulation, furniture, textiles, aircraft seating and marine vessels.

Total purchase price for the two acquisitions was us$211 million, a multiple of 12.3X EBITDA before synergies. Annual run-rate synergies of US$8 million are expected to be realiSed over the next three years, resulting in a post synergy multiple of 8.4X EBITDA.

“With these acquisitions, we have added deep market knowledge, strong customer relationships and a local manufacturing footprint, which will enable H.B. Fuller to capitalise on access to regional capabilities in the UK and core Europe and to fully leverage our CA technology portfolio much more effectively,” said H.B. Fuller President/CEO Jim Owens.

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