Clariant has announced that final agreements regarding the sale of its pigments business have been reached with a consortium consisting of the Heubach Group (“Heubach”) and SK Capital Partners (“SK Capital”). As part of the transaction, the pigments business will be valued at an enterprise value (EV) on a cash and debt-free basis of CHF 805 million to CHF 855 million, depending on an earn-out payment of CHF 50 million, the tied to the financial results of the pigments business in 2021. This corresponds to 10.7 to 11.4 times the independent adjusted 12-month EBITDA as of April 2021 (LTM).
Clariant to Reinvest in Combined Business
At the end of the transaction, Clariant will reinvest in the combined business and thus become a 20% shareholder in the resulting holding company alongside Heubach and SK Capital. The combined company will be a global pigment supplier with approximately 3,000 employees, annual sales of more than EUR 900 million and extensive service and production capabilities worldwide.
With the reinvestment, Clariant can participate in the further increasing profitability of the pigments business, which results from an efficiency program that has been started, and also benefit from future growth opportunities and synergy effects from the combination with the Heubach pigments business.
Transaction Expected to Close in First Half of 2022
The transaction is subject to customary closing conditions and regulatory approvals. The parties expect the transaction to close in the first half of 2022. Pigments' stake in Infraserv Höchst Deutschland is not part of the transaction.
“
We are pleased to announce the agreements with Heubach and SK Capital to sell our pigments business. This success is a final step in the divestment program and portfolio realignment announced in July 2018. We are sure that with Heubach and SK Capital we have found the right owners for this business, for our customers as well as for our colleagues and other stakeholders. Now we can fully focus on increasing sales and profitability in our core business areas Care Chemicals, Catalysis and Natural Resources,” said Conrad Keijzer, chief executive officer of Clariant.
Johann Heubach, chief executive officer of the Heubach Group added: “
Heubach and Clariant Pigments are a perfect match. Through the combination of industry-leading technologies, a product portfolio that serves a wide range of customer requirements, and a global production and service presence, the newly created Heubach Group will be able to meet the needs of our global customer base in the areas of coatings, plastics, Serve colors and specialty applications with industry-leading products and services. "
Aaron Davenport, managing director of SK Capital, added: "
Clariant Pigments is a leading global provider of color solutions, and together with our new partners, Heubach Group and Clariant, we see a tremendous opportunity to create significant value for all stakeholders."
With the completion of the transaction, Clariant will end its planned divestments as part of the portfolio realignment, after the healthcare packaging and masterbatches businesses had already been sold. The pigments divestment completes Clariant's transformation into a company with high-quality specialties with above-average growth, higher profitability and stronger cash generation.
Proceeds from the sale of the Pigments business will be used to invest in growth projects within the core business areas, to implement the strategy with a focus on sustainability and innovation, to finance performance improvement programs and to strengthen the balance sheet and to finance reinvestment in the Combined pigment business used by Clariant and Heubach.
Source: Clariant