Evonik Industries AG recently announced it has acquired the silica business of J.M. Huber for $630 million. This reportedly enables Evonik to expand its position in North America and Asia.
“Huber Silica will significantly strengthen our growth segment Resource Efficiency,” said Klaus Engel, chairman of the executive board of Evonik. “In addition, it offers the opportunity to strategically develop Evonik’s portfolio.”
“The silica business has been part of Huber since the 1950s and paved the way for our company’s global expansion into engineered materials,” said Mike Marberry, president and CEO of Huber. “While it is difficult to part with a longstanding business, we see Evonik as an excellent strategic fit for both our silica customers and employees.”
Huber’s business reportedly is oriented toward applications in the consumer goods industry, such as the dental sector. To date, Evonik’s silica business has been focused on industrial applications, such as the tire and coatings industries.
“Combining the complementary silica businesses of Evonik and Huber will strengthen an important pillar of our portfolio,” said Christian Kullmann, executive board member for strategy at Evonik. “Also, Huber Silica is an excellent regional fit with its focus on the U.S., China and India.”
For the 2016 financial year, Huber Silica is expected to achieve sales of close to $300 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $60 million. This corresponds to an EBITDA margin of more than 20%.
Through the ideal complementarity of the two business areas, Evonik expects to generate synergies of $20 million, largely in the areas of production, logistics, and procurement as well as through harmonization of the product portfolio. Evonik expects to have all synergy measures implemented by 2021. The transaction is scheduled to be completed in the second half of 2017.