LANXESS and Advent International Announce High-Performance Engineering Polymers Joint Venture
COLOGNE, Germany — Specialty chemicals company LANXESS and private equity investor Advent International (Advent) are establishing a joint venture for high-performance engineering polymers. The two companies signed an agreement to acquire the DSM Engineering Materials business (DEM) from Dutch group Royal DSM, which will become part of the new joint venture. The purchase price is around €3.7 billion and will be financed by the joint venture via equity from Advent and external debt. The business represents sales of around €1.5 billion with an EBITDA margin of approximately 20%. DEM is reportedly one of the leading global suppliers in high-performance specialty materials that address key market needs in electronics, electrical and consumer goods. The transaction is still subject to approval by the authorities. Closing is expected in the first half of 2023.
In addition, LANXESS will contribute its High Performance Materials (HPM) business unit to the joint venture. LANXESS reports that HPM is one of the leading suppliers of high-performance polymers, which are used primarily in the automotive industry. The business represents annual sales of around €1.5 billion with EBITDA pre-exceptionals of around €210 million. Advent will hold at least 60% in the joint venture. LANXESS will receive an initial payment of at least €1.1 billion and a stake of up to 40% in the future joint venture. Following the transfer to the joint venture, the HPM business will no longer be fully consolidated at LANXESS, but will be included in the consolidated financial statements at equity.