The Valence Group has advised Evonik Industries AG on its announced acquisition of the Performance Materials business of Air Products & Chemicals, Inc. for an enterprise value of $3.8bn.
The Performance Materials business, part of Air Products’ Materials Technologies division, is a global leader in specialty and coatings additives, such as epoxy curing agents, amine-based polyurethane additives and specialty wetting agents. The combination strengthens and complements Evonik’s product portfolio in terms of end markets, technologies and geographic footprint, and is expected to generate synergies of at least $80m per annum, with incremental tax benefits worth in excess of $500m.
Air Products Performance Materials generated revenue of $1.08bn in 2015 with a corresponding EBITDA of $242m, representing a margin of over 22%. Headquartered in Allentown, PA, the business employs 1,100 globally (of which >20% in R&D), with 50% of its sales in the Americas, 26% in Asia and 24% in Europe, supported by a worldwide network of 11 manufacturing plants and 8 R&D centers. By focusing on high end niche applications, customer specific solutions and truly innovative products, the business has maintained consistently high margins with low capital intensity and strong cash generation.