Ingevity has signed an agreement with Perstorp Holding to acquire the Capa caprolactone division of Perstorp in a cash transaction valued at approximately €590m(approximately $675m.)
The acquisition is subject to certain regulatory approvals and other customary closing conditions, and Ingevity expects to close on the transaction late in the first quarter of 2019.
Capa is the global market leader in the production and commercialization of caprolactone and high-value downstream derivatives, including caprolactone polyols, caprolactone thermoplastics, caprolactone lactides, and hexanediol (HDO).
The division’s products are key components in adhesives, bioplastics, coatings, elastomers and resins. The business operates a manufacturing facility in Warrington, England, U.K., and employs approximately 90 people.
Capa expects revenues of approximately €150 million (approximately $175 million) and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately €50 million (approximately $60 million) for the 2018 fiscal year, representing adjusted EBITDA margins in the mid-30s percent range.
The acquisition is expected to be immediately accretive to Ingevity’s earnings in the first full year. Ingevity will include the business in the company’s Performance Chemicals segment and report revenues as “Engineered Polymers.”
Ingevity president and CEO Michael Wilson said: “The Capa division is a strong, market-leading business focused on high-growth end-use applications, and as such is a complementary fit with Ingevity’s business model and capabilities.
“Like our current businesses, Capa leverages technology-focused relationships to drive customer intimacy and employs a similar manufacturing process and approach.”
“We are very excited to be adding such a unique business to our company; one that will provide new avenues for strategic growth,” he said. “What’s more, Capa’s top-tier financial profile and performance will drive value creation to the benefit of our shareholders.”
“The senior managers and employees of the Capa division are looking forward to joining Ingevity,” said Stephen Lewis, vice president, Caprolactones for Perstorp. “We believe Ingevity is a great cultural fit for our people and the combination of these two companies will accelerate our success.”
Ingevity will fund this transaction through a combination of the company’s cash and existing bank credit facility. J.P. Morgan acted as financial advisor and Eversheds Sutherland acted as legal counsel to Ingevity.
Source: Company Press Release