Lanxess Takes Chemours’ Disinfectants Business

“We plan to enhance our position particularly in mid-sized, less cyclical...
“We plan to enhance our position particularly in mid-sized, less cyclical markets with high margins and sound growth prospects,” Matthias Zachert, CEO

German chemical producer Lanxess has agreed to buy the Clean and Disinfect business of US-based Chemours for €210 million. The acquisition is expected to close in the second half of 2016, subject to regulatory approvals. The business comprises active ingredients as well as specialty chemicals used in disinfectant and hygiene solutions and includes three production sites in Memphis, Tennessee and North Kingstown, Rhode Island, both in the US, and Sudbury, Suffolk, UK.

This is Lanxess’ first acquisition since completing its realignment program launched in 2014 following the return of former chief financial officer Matthias Zachert as CEO.

Zachert said Lanxess has made quick headway and is now expanding its specialty chemicals portfolio to increase profitability and resilience. “We plan to enhance our position particularly in mid-sized, less cyclical markets with high margins and sound growth prospects,” he said.

In 2015, the Chemours business achieved sales of around €100 million, roughly half of which was in North America, where Zachert said he still sees good opportunities.

The acquisition will be accretive in the first fiscal year on an earnings-per-share basis. It is expected to contribute annual EBITDA of around €20 million, which Lanxess said will increase gradually through synergies to about €30 million by 2020.

The Clean and Disinfect business, comprising three world-leading segments: disinfectants, potassium monopersulfate and chlorine dioxide, focuses on the veterinary sector. Core product among disinfectants, Virkon S powder, is said to have proven successful against multiple viruses, bacteria and fungi. It is used to combat major diseases such as Foot-and-Mouth, Swine Vesicular and Avian Influenza. Lanxess said the global veterinary disinfection market is expected to grow by 6% annually for the period 2015-2020.

Potassium monopersulfate is an active ingredient used in pool and spa applications, disinfectant formulations (especially Virkon brands), personal care, and the electronics industry. Its core brand is Oxone.

The chlorine dioxide segment provides package solutions for industrial water treatment.

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