Specialty chemicals company Lanxess has come to an agreement with Royal DSM to acquire DSM Elastomers for €310m. Lanxess says the deal help strengthen its production technology for ethylene propylene diene monomer (EPDM).
The price roughly represents six times the expected EBITDA of 2010 and will be financed out of existing liquidity.
“We look forward to welcoming DSM’s professional EPDM team as well as its impressive assets to our core synthetic rubber activities,” Axel Heitmann, Lanxess CEO, said in a statement. “The transaction will also be an important step towards our goal of achieving roughly €1.4bn EBITDA pre exceptionals in 2015.”
Earlier this year, the company said it planned to focus on small to medium-sized acquisitions after announcing a plan to increase its main profit indicator by roughly 80% over the next five years. The German group said it is targeting EBITDA pre exceptionals of approximately €1.4bn in 2015, up from its forecast of approximately €800m in 2010.
The group will use a dual-track growth strategy of organic and external growth, but stressed that “organic growth will play the more dominant role”.
DSM says the sale is part of an ongoing strategy to focus on life and material sciences.
The transaction is subject to approval from antitrust authorities and is expected to close in the first months of 2011.
Lanxess acquires DSM Elastomers