10.25.16
Ferro Corporation entered into an agreement to acquire Cappelle Pigments NV and acquired certain assets of Delta Performance Products for aggregate consideration of approximately $60 million.
Sales for the two businesses in 2016 are estimated to be approximately $76 million in the aggregate and adjusted EBITDA in 2016 is expected to be approximately $11 million. Based on estimated 2016 adjusted EBITDA, excluding expected synergies, the purchase price of the two businesses represents a combined transaction multiple of approximately 5.6X.
Ferro signed a definitive agreement to acquire 100% of the stock of Belgium-based Cappelle Pigments for €50.5 million (approximately $56 million) on a cash-free and debt-free basis. The transaction is expected to close by year end, subject to customary closing conditions, including regulatory review.
Cappelle is a 125-year-old, privately held company that produces specialty, high-performance inorganic and organic pigments used in coatings, inks and plastics and sells its products in more than 75 countries. Cappelle specializes in weather-, heat-, and light-resistant organic pigments. The company is also a market leader in certain inorganic pigments that complement Ferro’s market leadership positions in Complex Inorganic Colored Pigments (“CICPs”) and Ultramarine Blue pigments.
Ferro purchased certain assets of Delta Performance Products. This business produces customized colorant blends that utilize Ferro’s CICPs for the concrete and outdoor hardscape markets.
Peter Thomas, chairman, president and CEO of Ferro Corporation, said, “These acquisitions are great additions to our growing Pigments business. Both fit extremely well into the strategy for our color solutions businesses, and we are excited about the opportunities these assets present to enhance shareholder value. Over the next 12 to 24 months, between the two businesses, we expect to realize commercial and operating synergies of $3 million to $4 million.
These acquisitions are much like the Nubiola acquisition we made last year. They both increase the breadth of options we can offer our customers, increase our technical capabilities and enhance our market position. The transactions will increase Ferro’s PPO business by approximately 30% and expand our addressable market for pigments by a factor or four, to approximately $4 billion. The addition of Cappelle’s proprietary pigments and capabilities will advance our expansion into the specialty organic pigment market and round out our product portfolio. The Delta transaction enhances our position as a manufacturer of engineered colorants and custom blends.”
“These businesses demonstrate the value proposition of our Pigments business. We create value for our customers by combining and manipulating pigments to produce specialized color solutions that provide functional attributes for our customers’ end products, or improve the effectiveness and efficiency of their supply chain and manufacturing processes," Thomnas concluded.
Sales for the two businesses in 2016 are estimated to be approximately $76 million in the aggregate and adjusted EBITDA in 2016 is expected to be approximately $11 million. Based on estimated 2016 adjusted EBITDA, excluding expected synergies, the purchase price of the two businesses represents a combined transaction multiple of approximately 5.6X.
Ferro signed a definitive agreement to acquire 100% of the stock of Belgium-based Cappelle Pigments for €50.5 million (approximately $56 million) on a cash-free and debt-free basis. The transaction is expected to close by year end, subject to customary closing conditions, including regulatory review.
Cappelle is a 125-year-old, privately held company that produces specialty, high-performance inorganic and organic pigments used in coatings, inks and plastics and sells its products in more than 75 countries. Cappelle specializes in weather-, heat-, and light-resistant organic pigments. The company is also a market leader in certain inorganic pigments that complement Ferro’s market leadership positions in Complex Inorganic Colored Pigments (“CICPs”) and Ultramarine Blue pigments.
Ferro purchased certain assets of Delta Performance Products. This business produces customized colorant blends that utilize Ferro’s CICPs for the concrete and outdoor hardscape markets.
Peter Thomas, chairman, president and CEO of Ferro Corporation, said, “These acquisitions are great additions to our growing Pigments business. Both fit extremely well into the strategy for our color solutions businesses, and we are excited about the opportunities these assets present to enhance shareholder value. Over the next 12 to 24 months, between the two businesses, we expect to realize commercial and operating synergies of $3 million to $4 million.
These acquisitions are much like the Nubiola acquisition we made last year. They both increase the breadth of options we can offer our customers, increase our technical capabilities and enhance our market position. The transactions will increase Ferro’s PPO business by approximately 30% and expand our addressable market for pigments by a factor or four, to approximately $4 billion. The addition of Cappelle’s proprietary pigments and capabilities will advance our expansion into the specialty organic pigment market and round out our product portfolio. The Delta transaction enhances our position as a manufacturer of engineered colorants and custom blends.”
“These businesses demonstrate the value proposition of our Pigments business. We create value for our customers by combining and manipulating pigments to produce specialized color solutions that provide functional attributes for our customers’ end products, or improve the effectiveness and efficiency of their supply chain and manufacturing processes," Thomnas concluded.
