Sika to buy construction chemicals supplier MBCC for 5.2 billion euros

Sika has signed a definitive agreement to acquire MBCC Group, formerly BASF Construction Chemicals, from an affiliate of global private equity firm Lone Star Funds for CHF 5.
5 billion (EUR 5.
2 billion)
.
MBCC Group is a leading supplier of construction chemicals worldwide
.
The acquisition will complement and expand Sika's products and solutions across four of its five core technologies and seven of its eight target markets, and will further strengthen its geographic presence
.
The acquisition is scheduled to close in the second half of 2022
.

Headquartered in Mannheim, Germany, the MBCC Group is active in the field of building materials and additive materials
.
The MBCC Group employs approximately 7,500 people and operates in more than 60 countries and more than 130 production facilities
.
In 2021, the company's net sales are expected to reach CHF 2.
9 billion (EUR 2.
7 billion)
.

MBCC Group has a portfolio of world-renowned global and local brands with a strong reputation for quality and reliability
.
With its broad and balanced product offering, the MBCC Group is involved in all stages of the building life cycle and is an important contributor to the decarbonisation of the building industry
.

Thomas Hasler, CEO of Sika, said: “Two sustainability advocates will join forces.

Sika is first-class in sustainability solutions across the construction industry, and in the same way sustainability is at the heart of MBCC Group’s business
.
We Together, we will strengthen our complementary products and services throughout the building lifecycle
.
"

"We have found a perfect partner that shares our core philosophy.

Sika is known for its entrepreneurial spirit and strategy for profitable growth, including a strong record of acquisitions
.
Our products and capabilities will once again be at the heart of the business
.
" MBCC Group CEO Jochen Fabritius said: "We look forward to exploring new and exciting business opportunities with Sika
.
"

This transaction will accelerate Sika's resilient growth strategy for 2023 and beyond
.
By joining the MBCC Group's highly complementary product portfolio, Sika will expand its products and services in construction chemicals and industrial adhesives, with sales in excess of CHF 13 billion in 2023
.
Combined, Sika's sales in all target markets will amount to CHF 1 billion to CHF 2 billion, resulting in a very balanced product portfolio
.
Customers will benefit from a stronger and more efficient distribution network across all construction markets
.

Today, 70% of Sika's sales are generated by products that have a positive impact on sustainability, and more than 35% of MBCC Group's products are sustainable
.

Through the merger, Sika is committed to having 80% of its sales come from products that have a positive impact on sustainability
.

Financial parameters

The operational and production complementarity of Sika and MBCC Group is expected to lead to attractive integration opportunities, including revenue and cost synergies
.
Annual synergies are expected to reach CHF 160-180 million by 2025
.

The acquisition price represents an 11.
5x EV: 2022E EBITDA, which, if operational synergies are included, falls to 8.
5x EV:EBIT
.

The planned transaction financing is secured by a bridge loan facility
.
Sika remains committed to maintaining a strong investment-grade credit rating and intends to build a long-term funding structure comprised of cash, bank loans and capital market instruments
.