The acquisition of Arr Maz will enable Arkema to strengthen its long-term ambition of achieving over 80 % of sales in specialties by 2023. Arr Maz has commercial presence across North America, South America, Asia, Africa, and the Middle East.
USA – Arkema has reached another milestone in its journey of growth in specialties with the planned acquisition of Arr Maz. With 290 million dollar sales, 18 % Ebitda margin and around 2.5 % of capex to sales, Arr Maz is a US-based leader in specialty surfactants for crop nutrition, mining and infrastructure.
The acquisition of this profitable, resilient and low capital intensive business is fully in line with Arkema’s long-term ambition to achieve over 80 % of sales in specialties by 2023. Arr Maz will be integrated in Performance Additives, one of the three strong pillars which will drive growth of the High Performance Materials division, along with Adhesives and Technical Polymers.
One of the Global Leaders in Specialty Surfactants
Arr Maz offers tailored and sustainable solutions for the specific and ever-changing needs of its customers in a variety of industrial markets. Thanks to its formulation expertise and well-established leadership positions, Arr Maz has forged long-term relationships with major industrial customers, leaders in their own fields, to support their development.
Leader in several attractive niche markets, Arr Maz’s growth is driven by sustainable trends such as limited natural resources, a growing world population, and development of new energy sources.
In the crop nutrition market, Arr Maz offers innovative additives that enhance the efficiency and quality of fertilizer production and distribution while promoting responsible farming.
In the mining market, it offers a wide range of additives to help optimise grade recovery and process performance in mining operations, thereby enabling the most environmentally sound practices.
Moreover, in the infrastructure market, Arr Maz supplies additives that help improve road longevity, quality and recyclability. Arr Maz has built an extensive commercial presence in North America, South America, Asia and in the fast growing regions of the Middle East and Africa, where it recently opened state-of-the-art facilities. It employs 400 employees and operates nine manufacturing sites around the world.
Combined with Arkema’s strong expertise in formulation and specialty surfactants, this acquisition will join two organisations that are highly complementary in terms of geography as well as commercial and technological capabilities. Arkema will thus be well positioned to accelerate its growth in legacy markets and to enter new segments (additives for nutrients, lithium extraction and oil & gas process aids), with an expectation of delivering above-GDP growth.
A Superior Value Creation
Beyond Arr Maz’s favourable organic growth profile, significant and well-identified synergies, which are expected to amount to approximately 15 million dollars by 2023, support the attractive economics of the acquisition. They will pertain mostly to purchasing and commercial complementarities between Arkema and Arr Maz. Including these synergies and Arr Maz’s organic growth, the enterprise value / Ebitda multiple after four years is expected to stand at around seven times.
Finally, the acquisition is expected to have an accretive impact on cash and earnings per share from the first year of integration, and will contribute to the Group’s 2020 and 2023 objectives.
Completion of the transaction is expected in the summer of 2019, subject to approval by relevant antitrust authorities.