Evonik Acquires Porocel for $210 Million
24th August 2020
Evonik will acquire US-company Porocel for $210 million to accelerate the growth of its catalysts business. Based in Houston, Texas, Porocel offers a technology for the rejuvenation of desulfurization catalysts, which are in increasing demand to produce low-sulfur fuel. Porocel's core competence is an efficient technology for purification adsorbents, sulfur recovery catalysts and hydroprocessing services highlighted by rejuvenation of used desulfurization catalysts. In addition, Porocel has available production capacity, enabling Evonik to speed up expansion of its existing business with fixed-bed catalysts, the Essen-based group said.
“This acquisition is the next logical step in the strategic development of our portfolio. Our focus is on stable and high-margin specialty chemicals,” said Christian Kullmann, Chairman of the Executive Board. “We are systematically expanding the share of our specialty businesses – and that at an attractive valuation.”
The purchase price is 9.1 times adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in 2019. The transaction is expected to close by the end of 2020 and is subject to approval by the relevant authorities.
Porocel generated sales of approximately $100 million and EBITDA of about $23 million in 2019 and has increased its EBITDA significantly in the last 3 years, driven by new product development through an expansion of research and development capabilities. The company has more than 300 employees worldwide and production facilities in the US, Canada, Luxembourg, and Singapore. The acquisition gives Evonik access to major customers in the refinery and petrochemicals sector.
Evonik said that Porocel’s global position will strengthen the worldwide presence of its catalyst activities, as the complementary fit to Evonik’s existing catalyst portfolio and especially the available production capacities offer considerable growth opportunities. Evonik expects to increase sales of the combined catalyst business to significantly more than €500 million by the end of 2025 without the need for investment in new capacities.
“Sustainability and especially circular economy play a decisive role for us when it comes to acquisitions and the orientation of our portfolio,” said Claus Rettig, Head of the Smart Materials division. “With the acquisition of Porocel we are meeting increasing demand that is coming from a trend towards sulfur-free fuels as well as reducing CO2 emissions and saving resources. The catalyst rejuvenation process results in significantly less CO2 emissions than the manufacture of fresh catalysts, while yielding comparable efficiency and at a much lower cost.”
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