Evonik Industries has acquired the silica business of US company, JM Huber, for US$630m, allowing the German supplier to expand its position in North America and Asia.
“Huber Silica will significantly strengthen our growth segment, Resource Efficiency,” said Evonik chairman, Klaus Engel. “In addition, it offers the opportunity to develop Evonik’s portfolio.”
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For his part, Huber president and CEO, Mike Marberry added: “The silica business has been part of Huber since the 1950s and paved the way for our company’s global expansion into engineered materials.
“While it is difficult to part with a longstanding business, we see Evonik as an excellent fit for both our silica customers and employees.”
The silica market is characterised by its variety of applications and is showing above-average annual growth of 4% to 6%. To date, Evonik’s silica business has been focused on industrial applications, for example in the tyre and coatings industries.
“Combining the complementary silica businesses of Evonik and Huber will strengthen an important pillar of our portfolio,” noted Evonik board member for strategy, Christian Kullmann. “Also, Huber Silica is an excellent regional fit with its focus on the US, China and India.”
For the 2016 financial year, Huber Silica is expected to achieve sales of close to US$300m and an EBITDA of US$60m. This corresponds to an EBITDA margin of more than 20%.
Evonik expects to generate synergies of US$20m, largely in the areas of production, logistics and procurement as well as through harmonisation of the product portfolio. Evonik expects to have all synergy measures implemented by 2021.
