Evonik acquires the silica business of J. M. Huber for 630 million US dollars (aprox. 600 million EUR). The transaction is scheduled to be completed in the second half of 2017, subject to approval by the responsible authorities.
Huber’s silica business is especially oriented towards applications in the consumer goods industry, the dental sector, for example. Evonik’s business has been focused on industrial applications, for example, in the tire and coatings industries. Evonik’s silica products are also being applied as flow additives and carriers for the manufacture of foodstuffs, cosmetics, pharmaceuticals, and silicones.
The silica market shows above-average annual growth of 4–6 %. For the 2016 financial year, Huber Silica is expected to achieve sales of close to 300 million US dollars and an EBITDA of 60 million US dollars. This corresponds to an EBITDA margin of more than 20 %. Through the ideal complementarity of the two business areas, Evonik expects to generate synergies of 20 million US dollars, largely in the areas of production, logistics, and procurement as well as through harmonization of the product portfolio. Evonik expects to have all synergy measures implemented by 2021.
The depreciations customarily associated with asset deals will lead to lower future cash tax payments with a net present value of around 80 million US dollars. On this basis, the purchase price (enterprise value) including synergies and tax effects is about seven times the annual EBITDA, or 10.5 times before tax effects and synergies.