 "Evonik acquires JM Huber's silica business for $ 630 mn")
German specialty chemicals major Evonik Industries AG has acquired the silica business of the US-based JM Huber for $ 630 million, enabling Evonik to expand its position in North America and Asia in this profitable and resilient business. “Huber Silica will significantly strengthen our growth segment Resource Efficiency. In addition, it offers the opportunity to strategically develop Evonik’s portfolio,” commented Klaus Engel, chairman of the executive board of Evonik.
Mike Marberry, president and chief executive officer of Huber, stated, “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 strategic fit for both our silica customers and employees.”
The silica market is characterised by its variety of applications and shows above-average annual growth of 4 to 6 percent. Huber’s business is especially oriented towards applications in the consumer goods industry, the dental sector for example. To date, Evonik’s silica business has been focused rather 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. Also, Huber Silica is an excellent regional fit with its focus on the US, China and India,” explained Christian Kullmann, executive board member for strategy at Evonik.
For the 2016 financial year, Huber Silica is expected to achieve sales of close to $ 300 million and an EBITDA of $ 60 million. This corresponds to an attractive EBITDA margin of more than 20 percent.
Through the ideal complementarity of the two business areas, Evonik expects to generate synergies of $ 20 million, 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.
Silica are small particles based on silicon dioxide. Depending on the surface structure, they have a significant influence on the final product characteristics. Production is strongly technology-driven and thus ensures intensive and lasting customer relationships. The manufacturing process is independent from oil-based raw materials and therefore well-suited to Evonik’s sustainable business strategy
JM Huber Corporation, one of the largest family-owned businesses in the US, was founded in 1883 by Joseph Maria Huber, an immigrant from Germany. Today, the company has a broad product portfolio ranging from specialty chemicals to the forestry sector.
Evonik has a leading position as a supplier of silica for tyre manufacturers and the paint and coatings industry. Evonik’s silica products are also being applied as flow additives and carriers for the manufacture of foodstuffs, cosmetics, pharmaceuticals and silicones.