Element Solutions Inc announces planned acquisition of Coventya
MIAMI – (COMMERCIAL THREAD) – Element Solutions Inc (NYSE: ESI) (“Element Solutions”, “ESI” or the “Company”), a global and diversified specialty chemicals company, today announced that it has made a firm offer * for to acquire Coventya Holding SAS (“Coventya”), a global supplier of specialty chemicals to the surface finishing industry. Under the offer, Element Solutions will pay approximately 420 million euros in cash, including assumption or repayment of debt, subject to certain adjustments. The transaction is expected to close at the end of Q3 or Q4 2021, subject to receipt of certain regulatory approvals, completion of required employee consultation procedures and other customary closing conditions. Upon closing of the transaction, Coventya will join MacDermid Enthone Industrial Solutions and will be featured in the Industrial and Specialty segment of the company.
Coventya is a global specialist in the development of chemical metal finishing technologies with a range of solutions that provide decorative and functional coatings for industrial end markets in more than 60 countries. The company has manufacturing facilities in Asia, Europe and the Americas and its products serve customers around the world in the automotive, fashion, construction, electronics, goods end markets. consumption, energy and aerospace / military. Coventya is expected to generate annual revenue of around 160 million euros and adjusted EBITDA above 30 million euros for its 2021 fiscal year ending in September. On a pro forma basis after taking into account expected annualized synergies, the proposed purchase price represents less than 10x Coventya’s projected adjusted EBITDA for fiscal 2021.
President and CEO Benjamin Gliklich said: “We are very pleased to announce our proposed transaction with Coventya. This is a great company that fits our acquisition criteria perfectly and a company that we have admired for decades. Coventya has a long history of innovation and high quality solutions in attractive niche markets like ours. We believe that Coventya’s deep customer relationships, solution orientation and exceptional team will improve our business as well as the breadth and quality of the solutions we provide to our key markets. With this acquisition, we expect our MacDermid Enthone Industrial Solutions business to benefit from greater scale and strong complementary product offerings. We appreciate nothing more than investing behind our strong companies and leaders in equally great companies and teams. The opportunity with Coventya is a great case study for this, and we look forward to welcoming the Coventya team to the Element Solutions family. ”
Mr. Gliklich continued: “This acquisition should translate into positive results for both companies and their customers and shareholders. On a pro forma basis, we expect the acquisition to add approximately $ 0.07 to our annualized Adjusted EPS before synergies, which represents an increase of approximately 5% based on our previously announced Adjusted EPS guidance of $ 1. $ 30 or more for the whole of 2021. The synergies of this transaction must be significant. We expect to realize at least 13 million euros in annual synergies in the two years following the closing of the transaction. In our markets, opportunities of this size are rare, and we are delighted to have found one consistent with our acquisition strategy of investing in markets we know and in growing companies that we believe to be the best. under our ownership. Our philosophy of balancing operational excellence with prudent capital allocation works. Our execution and careful management of the balance sheet since the inception of Element Solutions allows us to fund this transaction without additional equity while pursuing our goal of maintaining a net leverage ratio equal to or less than 3.0x at the end of the period. year 2021. ”
Coventya CEO Erik Weyls said: “This transaction is an important milestone for our business. We expect Element Solutions to provide Coventya and its people with resources and capabilities that will accelerate our growth. This has long been a logical combination that we believe will provide customers with a wide range of improved solutions that will differentiate themselves in our markets. I am incredibly proud of the team that has made Coventya successful to date and grateful for their efforts in building such an exceptional business. The future is bright for our company and its employees, and we all look forward to being a part of the dynamic business that the Element Solutions team is building.
* Under French law, Coventya shareholders cannot accept the Company’s offer or enter into the binding purchase agreement before the completion of consultation procedures with certain employee representative bodies.
About Element Solutions Inc
Element Solutions Inc is a leading specialty chemicals company whose companies provide a wide range of solutions that improve the performance of the products people use every day. Developed using multi-step technological processes, these innovative solutions enable customers to manufacture processes in several key industries, including consumer electronics, power electronics, semiconductor manufacturing, communications and communications infrastructure. data storage, automotive systems, industrial surface finishing, consumer packaging and offshore energy. More information about Element Solutions is available at www.elementsolutionsinc.com.
Coventya is an international company that develops, manufactures and distributes specialty chemicals for the surface finishing industry in more than 5 continents and 60 countries. With a rich and diverse history dating back to 1927, Coventya is considered a global market leader in innovation and customer support. www.coventya.com
This press release contains forward-looking statements, including, but not limited to, statements relating to the ability of the parties to receive required regulatory approvals, to complete required employee consultation procedures and to meet other conditions of employment. customary closing in order to complete the acquisition of Coventya; Element Solutions’ ability to successfully integrate and achieve the expected benefits of this acquisition, including, but not limited to, the addition of approximately $ 0.07 to its annualized adjusted EPS, or an increase in approximately 5% based on its 2021 adjusted EPS forecast of $ 1.30 or more and at least € 13 million in annual synergies to be achieved within two years of the completion of this transaction; improving the global position and global offering of MacDermid Enthone Industrial Solutions; attractive technologies and new growth opportunities; Element Solutions’ objective of maintaining a net leverage ratio equal to or less than 3.0x at the end of 2021; and Coventya’s net sales and adjusted EBITDA results for its fiscal year 2021. These statements are based on management’s estimates and assumptions regarding financial performance and future events, and are believed to be reasonable, although they are inherently difficult to predict. Actual results could differ materially from those projected due to certain factors, including, without limitation, market and other general economic conditions, Element Solutions’ perception of the future availability of financing as well as factors included in its periodic and other reports filed with securities. and the Foreign Exchange Commission. Element Solutions does not undertake to update any forward-looking statements, whether as a result of new information, future events or otherwise.