Certain acquisitions often seem unexpected. Like the one of DSM Resins and Functional Materials Businesses by Covestro. The announcement follows the recent acquisition of the Erber Group by the global science-based company in Nutrition, Health and Sustainable Living.
Covestro acquires this new business for an Equity Value of €1.6 billion. The transaction will include all of DSM’s Resins & Functional Materials businesses, including DSM Niaga®, DSM Additive Manufacturing and the coatings activities of DSM Advanced Solar.
These businesses represented €1,012 million of DSM’s 2019 total annual net sales and €133 million of DSM’s 2019 total EBITDA. DSM will provide re-stated figures for its Materials Cluster ahead of its Q3 results. DSM anticipates a book profit on the transaction to be recognized upon closing. DSM expects to receive approximately €1.4 billion net in cash following closing, including repayment of RFM’s net debt, and after transaction costs and capital gains tax.
A new business of enhanced scale and technological capability
DSM Resins & Functional Materials, containing a Sustainable Coatings division and a Functional Materials division, provides highly-specialized, market-leading products such as resins for use in paints and other industrial applications, and optical fiber coatings.
In the AM industry especially, DSM activities include a wide range of product launches the latest one being the glass-filled polypropylene granules, involvement in social initiatives, acquisitions and a wide range of collaborations.
For the Co-CEOs of Royal DSM, Geraldine Matchett and Dimitri de Vreeze: “This sale builds on [their] approach of actively managing [their] businesses, as DSM continues to evolve as a purpose-led, science-based company operating in the fields of Nutrition, Health and Sustainable Living. The deal delivers strong value to DSM and is strategically attractive for all parties.” “In Covestro, we recognize a company that shares similar views on culture and the value of sustainability. We know that Covestro will be a good owner of these businesses for customers, colleagues and other stakeholders”, they state.
Completion of the transaction, which is subject to the customary conditions and approvals, is expected in H1, 2021. Further information about DSM Additive Manufacturing activities can be found here.
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