Essen, Germany – Evonik AG intends to acquire the silica business of US-based JM Huber Corp. for $630 million (€596 million), enabling it to expand its position in North America and Asia.
The firm said Huber Silica will significantly strengthen its resource efficiency growth segment and offers the opportunity to strategically develop Evonik's portfolio. Evonik said in a 9 Dec news release that it projects the transaction to be complete in the second half of 2017, subject to the approval of relevant authorities.
Huber Silica is expected to achieve nearly $300 million in sales for fiscal 2016 with an EBITDA of $60 million. Evonik said it expects to generate synergies of $20 million by 2021, largely in the areas of production, logistics and procurement in addition to the harmonization of the product portfolio.
The business consists of six facilities and about 4,000 employees.
"The silica business has been part of Huber since the 1950s and paved the way for our company's global expansion into engineered materials," Mike Marberry, president and CEO of Huber, said in a statement. "While it is difficult to part with a longstanding business, we see Evonik as an excellent strategic fit for both our silica customers and employees."
The silica market has shown above-average annual growth of 4 to 6 percent, Evonik said. Huber's business is particularly oriented toward applications in the consumer goods industry, citing the dental sector specifically.
On the other hand, Evonilk's silica business has been focused on the industrial sector, specifically the tires and coatings industries.
"Combining the complementary silica businesses of Evonik and Huber will strengthen an important pillar of our portfolio," Christian Kullmann, Evonik executive board member for strategy, said in a statement. "Also, Huber Silica is an excellent regional fit with its focus on the US, China and India."
JM Huber Corp. is one of the largest, family-owned businesses in the US with a broad product portfolio ranging from specialty chemicals to the forestry sector. Huber employs about 4,000 people in 20 countries.
Based in Germany, Evonik is a global specialty chemical company that's active in more than 100 countries with 33,500 employees and nearly $14.2 billion in sales. The firm said it has a leading position as a supplier of silica for tire manufacturers and the paint and coatings industry. Evonik's silica products also are being applied as flow additives and carriers for the manufacture of foodstuffs, cosmetics, pharmaceuticals and silicones.