PCC Rokita has signed a letter of intent with PCC Spółka Europejska regarding the planned contribution in kind of PCC MCAA and MCAA Spółka Europejska to PCC Rokita. The estimated value of both entities has been set at approximately PLN 289 million. According to the presented assumptions, the transaction would be non-cash, and in exchange for the contributed assets PCC SE would subscribe for newly issued shares in PCC Rokita. According to the company, the planned integration of PCC MCAA's operations is intended to strengthen the share of specialty products in the PCC Rokita Group's portfolio. The letter of intent does not yet constitute a binding commitment to complete the transaction. Its execution will depend on meeting a number of legal and business conditions, including obtaining the required corporate approvals. A valuation prepared by an independent entity using the discounted cash flow method determined the value of the contribution at PLN 289 million. The final number of newly issued PCC Rokita shares is to be determined on the basis of the six-month average share price, VWAP, at the time of the transaction. The detailed terms of the potential operation are to be set out in a separate agreement.
Commenting on the planned integration, Adam Jarosz, vice president of the management board of PCC Rokita, said that the company has for years been developing its product portfolio towards higher-margin products. As he underlined, "PCC Rokita is a mature company with a proven operating model, producing both bulk products and high-margin specialty products. We have been active in the market for more than eighty years and are a significant chemical company in our part of Europe. For years we have consistently invested, expanded our offering and deliberately shaped our portfolio towards higher-margin products. MCAA is a segment with promising growth prospects that can increase exposure to specialty products, non-cyclical end markets, the margin of high-purity products and the potential for further development in the United States. The integration of PCC MCAA's operations within the PCC Rokita Group may generate operational, commercial and strategic synergies."
Importance of PCC MCAA for the group
PCC MCAA is one of three producers of monochloroacetic acid in Europe, including its ultra-pure grade, U-P MCAA. This raw material is used in many branches of industry, including the production of agrochemicals, plant protection products, fertilisers, plastics, detergents, paints and coatings. The company is currently carrying out an investment in a solidification unit, which is intended to increase production capacity for formed products. According to the presented assumptions, the potential of PCC MCAA after completion of this investment is to be reflected in EBITDA of approximately PLN 50 million in 2030.
Referring to the market environment and the rationale for the planned integration, Adam Jarosz stated: "We have ambitious development plans based on solid foundations. A strong industrial base is a key operational advantage that determines our long-term value. The past year brought a cyclical weakening of results, mainly related to market factors such as lower demand in Europe, pressure from imports from Asia and high energy costs. Despite this, our structural competitive position remained intact. The integration of MCAA creates a foundation for further optimisation of operations and international expansion."
Expected synergy effects
The company indicates that incorporating PCC MCAA into the PCC Rokita Group could enable process harmonisation and better use of integrated production assets. According to the management board, such a structure may also increase the group's resilience to market fluctuations and strengthen its ability to compete internationally. An additional element is expected to be the possibility of achieving synergies in chlorine management. As Adam Jarosz noted, "The transaction builds value in PCC Rokita, which is acquiring a company with significant potential and a high degree of integration. By incorporating PCC MCAA into the Rokita Group structure, we will be able to harmonise processes and make better use of integrated production assets. At the same time, the transaction makes it possible to create a strong group capable of competing on the international market, while also increasing resilience to shocks. We have very often emphasised recently our investments in new electrolysers, and this investment will generate returns mainly through energy modulation. By having a chlorine consumer managed at the PCC Rokita level, we will also be able to record additional synergy effects here."
Business profile of PCC Rokita
PCC Rokita is a producer of specialty chemical products and industrial formulations. Together with several dozen companies, it forms the PCC Rokita Group. Since 2011, the company has issued bonds introduced to trading on the regulated GPW market, Catalyst, and since 2014 its shares have been listed on the Warsaw Stock Exchange.
The company's core operating area is the production and trading of chemical products used in the plastics industry, industrial chemistry, as well as the furniture, construction and automotive sectors. The group holds a leading position in the Central European market in such product groups as polyols, where it is the only producer of polyether polyols in Poland and the largest in Central and Eastern Europe, as well as chlorine derivatives, in which chlorine produced by PCC Rokita is a key raw material for a significant part of chemical products.
In addition, the company is the only producer in Poland of flake caustic soda as well as sodium hypochlorite and hydrochloric acid for the food industry. It is also a significant supplier of phosphorus-based and naphthalene-based compounds. PCC Rokita is the largest producer in Eastern Europe of phosphorus flame retardants for polyurethane foams and a significant producer of phosphorus plasticisers and thermal stabilisers for polyvinyl chloride, PVC.
