Specialty chemicals maker Evonik Industries agreed to acquire Houston-based Porocel Group for $210 million, the buyer said Aug. 26
The target provides technology for the efficient rejuvenation of desulfurization catalysts, which are used to produce low-sulphur fuel. Evonik, a German company with its North American headquarters in Parsippany, said Porocel has production capacity available that will allow it to quickly expand its catalyst business.
“This acquisition is the next logical step in the strategic development of our portfolio. Our focus is on stable and high-margin specialty chemicals,” said Christian Kullmann, chairman of Evonik’s executive board, in a statement. “We are systematically expanding the share of our specialty businesses – and that at an attractive valuation.”
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Evonik said the purchase price represents a multiple of 9.1 times Porocel’s 2019 earnings before interest, taxes, depreciation and amortization. The target generated sales of about $100 million and EBITDA of about $23 million in 2019. The company added it expects sales from its newly enlarged catalyst business would top 500 million euros ($591 million) by the end of 2025 without investing in new capacity. The deal will be financed from Evonik’s cash on hand.
“Sustainability and especially circular economy play a decisive role for us when it comes to acquisitions and the orientation of our portfolio,” said Claus Rettig, head of Evonik’s Smart Materials division. “With the acquisition of Porocel we are meeting increasing demand that is coming from a trend towards sulfur-free fuels as well as reducing CO2 emissions and saving resources. The catalyst rejuvenation process results in significantly less CO2 emissions than the manufacture of fresh catalysts, while yielding comparable efficiency and at a much lower cost.”
With the deal, Evonik said it would gain access to major customers in the refinery and petrochemicals sector.
“Our innovation power driven by the talented team at Porocel is well suited to Evonik’s culture and we look forward to growing the business further together,” said Terence McHugh, Porocel’s president and chief operating officer.
In June, Evonik named Bonnie Tully president for the North American region, replacing John Rolando who retired after 33 years with the company and predecessor entities.
