LANXESS completes acquisition of Emerald Kalama Chemical

●The acquisition will result in approximately $425 million in sales and approximately $90 million in EBITDA

● Synergies will bring about US$30 million in EBITDA over the next three years

Strengthening the Consumer Protection segment: Aromatic chemicals and preservatives for food, household, cosmetic and personal care applications

● Established a new flavor and fragrance business department

● LANXESS CEO Chang Mutian: "LANXESS will be more stable and profitable
.
"

Shanghai, August 4, 2021 - On August 3, specialty chemicals company Lanxess completed the acquisition of Emerald Kalama Chemical, the second largest acquisition in the company's history
.
The U.
S.
-based specialty chemicals maker is majority-owned by an affiliate of private equity firm American Securities LLC
.
All required regulatory approvals have now been received
.
Emerald Kalama Chemical has an enterprise value of USD 1.
075 billion (EUR 900 million)
.
The purchase price, after deduction of liabilities, is around $1.
04 billion (€870 million), and is financed by LANXESS' existing liquid assets
.

"Emerald Kalama Chemical provides another major impetus for our development path
.
The new business fits our strategy perfectly
.
We are strengthening LANXESS' position in high-growth markets and opening up new high-margin applications, in particular the food and beverage industry or cleaning products and cosmetics
.
In addition, Emerald Kalama Chemical is fully backward-integrated and strengthens our value chain in the
Consumer Protection business segment.
The Consumer Protection business segment thus becomes a stable and An important engine of profitability," said Chang Mutian, Chairman of the LANXESS Management Board
.
"A strong team is working hard to ensure that the integration of the company is completed quickly
.
"

With the closing of the transaction, LANXESS has added approximately 470 employees and three production sites – Calama, Washington (US), Rotterdam (Netherlands) and Widnes (UK)

The picture shows the Calama (USA) base in Washington state
.

The picture shows the Rotterdam (Netherlands) base
.

The picture shows the Widnes (UK) base
.

In 2020, Emerald Kalama Chemical's global sales were approximately US$ 425 million (€375 million) and EBITDA in the regular business area was approximately US$ 90 million (€80 million)
.
Over the next three years, LANXESS expects synergies to contribute an additional EBITDA of around USD 30 million (EUR 25 million)
.
Earnings per share (EPS) accretion will be realized in the first fiscal year following the acquisition
.

Expanded product portfolio for the consumer protection industry

About three-quarters of the acquired business' sales is attributed to specialty products for the consumer healthcare industry
.

The acquisition will make LANXESS one of the leading suppliers of flavor and fragrance products
.
The specialty chemicals company is poised for high growth rates in the flavor and fragrance products segment
.
Flavors and fragrances are mainly used in personal care products, cosmetics and proprietary fragrances, and food and beverages
.
LANXESS' new product portfolio includes more than 30 aromatic chemicals available in earthy, floral, fruity, spicy and herbal flavors
.

LANXESS is integrating this business into its newly created Flavors & Fragrances business unit, which will be part of the Consumer Protection business segment
.

The acquisition will also strengthen LANXESS' leading position in the preservatives business
.
The new products will be used in high-growth applications in the food and beverage industry and in detergents, fabric softeners, cosmetics and personal care products
.

Specialty Chemicals for Industrial Applications

About a quarter of the acquired business' sales comes from specialty chemicals for high-growth industrial applications such as plastics, paint coatings and adhesives
.
These products will be incorporated into the Polymer Additives business unit
.