Clariant, a focused, sustainable and innovative specialty chemicals company, today announced that final agreements have been reached with a consortium consisting of Heubach Group ("Heubach") and SK Capital Partners ("SK Capital") regarding the divestment of its Pigments business. As part of the transaction, the Pigments business is valued at an enterprise value (EV), on a cash and debt-free basis, of CHF 805 million to CHF 855 million, subject to an earn-out payment of CHF 50 million linked to the financial results of the Pigments business in 2021. This represents 10.7 to 11.4 times standalone 12-month adjusted EBITDA as of April 2021 (LTM).
Upon closing of the transaction, Clariant will reinvest in the combined business, becoming a 20% shareholder in the resulting holding company alongside Heubach and SK Capital. The combined company will be a global pigments provider with approximately 3,000 employees, annual sales of more than EUR 900 million and extensive service and production capabilities worldwide. The reinvestment will allow Clariant to participate in the further increasing profitability of the pigments business resulting from an efficiency program that has been initiated and to benefit from future growth opportunities and synergies from the combination with the Heubach pigments business.
The transaction is subject to customary closing conditions and regulatory approvals. The parties expect the transaction to be completed in the first half of 2022. The Pigments stake in Infraserv Höchst Deutschland is not part of the transaction.
"We are pleased to announce the agreements with Heubach and SK Capital on the sale of our Pigments business. This success is a final step in the divestment program and portfolio realignment announced in July 2018. We are confident that in Heubach and SK Capital we have found the right owners for this business, both for our customers and for our colleagues and other stakeholders. We can now focus on increasing the sales and profitability of our core businesses Care Chemicals, Catalysis and Natural Resources," said Conrad Keijzer, Chief Executive Officer of Clariant.
Johann Heubach, Chief Executive Officer of the Heubach Group, added: "We have been in the pigments business for more than 200 years. My late father and I set out to drive consolidation in the pigments industry and the combination of Heubach and Clariant Pigments is a major milestone in this vision. Heubach and Clariant Pigments are a perfect match. By combining industry-leading technologies, a product portfolio that serves a broad range of customer needs, and a global manufacturing and service presence, the newly created Heubach Group will be able to serve the needs of our global customer base in coatings, plastics, paints and specialty applications with industry-leading products and services."
Aaron Davenport, Managing Director of SK Capital, added: "Clariant Pigments is a global leader in color solutions, and together with our new partners, Heubach Group and Clariant, we see a tremendous opportunity to create significant value for all stakeholders."
With the closing of the transaction, Clariant will complete its planned divestitures as part of its portfolio realignment, following the previous divestitures of its Healthcare Packaging and Masterbatches businesses. The Pigments divestment completes Clariant's transformation into a high-value specialties company with above-average growth, higher profitability and stronger cash generation. The proceeds from the sale of the Pigments business will be used to invest in growth projects within the core businesses, to implement the strategy with a focus on sustainability and innovation, to fund the performance improvement programs, to strengthen the balance sheet and to fund the reinvestment in the combined Clariant and Heubach Pigments business.
Clariant Pigments is a leading global supplier of high-quality organic pigments, pigment preparations and dyes used in the automotive industry, for industrial coatings and architectural paints as well as for the plastics industry. In 2020, the Business Unit's 1 900 employees generated sales of approximately CHF 850 million on a stand-alone adjusted basis.
