Sika Boosts Construction Chemicals with MBCC Buy
Swiss specialty chemicals company Sika has agreed to buy MBCC Group, formerly BASF’s construction chemicals business, from an affiliate of private equity company Lone Star Funds for €5.2 billion. Sika described the deal as “highly complementary” and added that it expects the addition of MBCC’s portfolio to push sales above €12.3 billion by 2023.
The transaction remains subject to regulatory approval, but Sika is targeting closure during the second half of 2022.
The Baar-based group is anticipating annual synergies of between €152 million and €171 million. “Together we will reinforce our complementary range of products and services across the entire construction life cycle,” said Sika CEO Thomas Hasler. “With our combined portfolio, we will enable and accelerate the future of sustainable construction for the benefit of customers, employees, shareholders, and coming generations.”
Commenting on the acquisition, Swiss investment group Vontobel said in a note to clients that “based on Sika’s strong track record regarding the integration of acquired businesses, we believe that also this deal will create substantial shareholder value.” It added that the deal “will add about 30% to Sika’s topline and 25% to its EBITDA, thereby making it the undisputed global market leader in construction chemicals.”
However, Baader Helvea analyst Markus Mayer expressed his surprise that Sika was buying the former BASF business for a 64% uplift to the price Lone Star paid in 2019, after Sika had at the time flagged several weak points. Speaking to Reuters, Mayer said: “To turn around the weak spots of MBCC will be one of the most challenging tasks for Sika. In contrast, the integration track record of Sika is very strong and therefore if anyone can turn around the business it might be Sika.”
Headquartered in Mannheim, Germany, MBCC has approximately 7,500 employees in more than 60 countries and more than 130 production facilities. The company is expected to generate net sales of €2.7 billion this year.
The deal is the latest in a string of acquisitions that Sika has struck so far this year in the US, Mexico, Brazil, China, Japan and Russia. MBCC has itself acquired three companies this year, including US-based Fabpro Polymers in August, and Germany’s TPH Bausysteme and Australia’s Bluey Technologies, both in March.
Author: Elaine Burridge, Freelance Journalist
