German chemicals producer Evonik has agreed to sell its Methacrylates business to private equity investor Advent International for an enterprise value of €3 billion. The plans announced a year ago reflect its “consistent strategy execution to focus on specialty chemicals,” the Essen-based player said.

The announcement was due to be made at the annual results press conference today but was brought forward to yesterday evening after the news was leaked to UK newspaper Financial Times. The paper said chemicals giant Ineos, along with private equity firm SK Capital and a consortium of Triton and Rhone Capital had been interested buyers.

Selling price of the business with 18 production sites and 3,900 employees worldwide is 8.5 times EBITDA, which from 2016 to 2018 totalled about €350 million annually on sales of around €1.8 billion. Figures for 2019 are forecast to be at a similar level.

Evonik said the net purchase price following deductions consisting primarily of pension obligations will be about €500 million lower. Over the past two decades, Advent has been one of the leading buyers and sellers in the chemicals and plastics sectors.

Following regulatory approvals, the sale is planned to be wrapped up in this year’s third quarter. It will comprise the Methacrylates, Acrylic Products and the CyPlus business lines, in the main MMA and PMMA. The German company is ranked number two globally for both for the monomer and polymer.

Without being specific, Evonik said it plans to retain some of its methacrylate resins activities.

While part of the proceeds will be used to strengthen the balance sheet, a sizeable share has been earmarked for “targeted growth projects” such as the acquisition of US hydrogen peroxide and peracetic acid producer PeroxyChem from One Equity Partners for $625 million.

Additionally, some of the intake will be used to fortify the existing specialty chemicals portfolio, for example the new polyamide 12 plant to be built in Marl, Germany. Evonik said these businesses “generate an attractive margin and an above-average cash flow.”

Expected to cost around €400 million, the PA 12 plant, the company’s largest investment in Germany so far, is expected to be operational in the first six months of 2021. The new production facility will increase overall capacity by more than 50%. Evonik currently produces around 40,000 t/y of the specialty polymer.