M&As: Milliken acquires Zebra-chem; Lanxess signs contract to acquire Emerald Kalama Chemical

US materials firm Milliken & Company has formally acquired Zebra-chem, a German firm headquartered in Bad Bentheim that is known for its peroxide and blowing agent masterbatches. Terms were not disclosed.

With more brands and governments globally setting goals to increase their use of recycled materials, plastics manufacturers are faced with the challenges of using recycled plastics effectively. Peroxide masterbatches, like those from Zebra-chem and Milliken, make it possible to incorporate up to 100% recycled content into these new plastics.

“Milliken’s long-term focus on innovation and sustainability encourages us to consider how we contribute to some of today’s leading challenges, like how to effectively incorporate recycled plastics in manufacturing,” stated Halsey Cook, Milliken & Company president and CEO. “I’m excited to welcome the exceptional talent within Zebra-chem as they join the passionate team at Milliken to move the needle on sustainable innovation.”

Zebra-chem carries a respected portfolio of chemical blowing agent and peroxide masterbatches for application in most thermoplastics and engineering plastics.

“Zebra-chem’s leading position in Europe allows Milliken to leverage its congruent innovation platforms, global presence and commercial expertise to accelerate market solutions that improve and increase manufacturing with recycled plastics,” said Wim Van de Velde, vice president, Europe, Middle East and Africa, for Milliken’s Chemical Division. “Our combined skillsets will facilitate faster and more customized solutions that achieve our customers’ sustainability goals.”

Combining the strengths of Milliken and Zebra-chem opens up new potential to expand solutions that accelerate and improve plastic recycling. Customers will benefit from enhanced research and development capabilities, shared knowledge, and a broadened product portfolio from trusted, leading manufacturers.

As Zebra-chem integrates into Milliken, daily operations will continue without interruption, including relationships with existing suppliers and customers.

Meanwhile in other news, German specialty chemicals company Lanxess is accelerating its growth course and signed a binding agreement to acquire 100% shares in Emerald Kalama Chemical. The US-based company is a globally leading manufacturer of specialty chemicals, especially for the consumer segment, and is majority-owned by affiliates of the US private equity firm American Securities LLC.

The enterprise value of Emerald Kalama Chemical amounts to US$1.075 billion. After deducting debt-like items, the purchase price is around US$1.04 billion, which Lanxess will finance from existing liquidity. The transaction is expected to be completed in the second half of 2021. It is still subject to approval by the relevant authorities.

In 2020, Emerald Kalama Chemical achieved sales of around US$425 million and EBITDA pre exceptionals of approximately US$90 million. Within three years following the completion of the transaction, Lanxess expects an additional annual EBITDA contribution of around US$30 million from synergy effects. The acquisition will already be earnings per share accretive in the first fiscal year after its completion.

“We are gaining further momentum on our growth course. The businesses of Emerald Kalama Chemical are an ideal fit for us. We will further strengthen our Consumer Protection segment and open up new application areas with strong margins, for example in the food industry and animal health sector. In addition, we will also enlarge our presence in our growth region of North America. All this will make us even more profitable and stable,” said Matthias Zachert, Chairman of the Board of Management of LANXESS AG.

Emerald Kalama Chemical employs approximately 500 employees worldwide and runs production sites in Kalama, Washington (US), Rotterdam (Netherlands) and Widnes (Great Britain). Emerald Kalama Chemical generates around 45% of its turnover in North America.

Emerald Kalama Chemical generates about 75% of its turnover with specialties in the consumer segment. These include preservatives for food, household and cosmetic applications, flavors and fragrances as well as products for animal nutrition. The remaining 25% of sales come from the specialty chemicals business for industrial applications, including the plastics and adhesives industries.

With the acquisition, Lanxess adds it is pursuing a targeted expansion of its portfolio: The company has a strong position in the global business with antimicrobial active ingredients and preservatives, including for consumer protection products and animal hygiene. Examples are disinfectants effective against the Coronavirus or the African Swine Fever.

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(PRA)

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