Under the terms of the proposal, Clariant will receive 85 million francs ($94.5 million) and a 23 percent stake in the enlarged supplier of treatments, dyes and coatings. The transaction values Clariant’s leather unit at about 7.5 times earnings before interest taxes, depreciation and amortization, the company said in a statement today.
“Through this planned transaction, Clariant will achieve its goal to actively participate in the consolidation of the leather chemicals industry by creating the global leader,” Chief Executive Officer Hariolf Kottmann said in a statement, adding that it “marks the last big step” in repositioning Clariant’s portfolio.
The deal creates an enlarged leather-chemical company with total sales of about 616 million euros ($846 million) and scope to cut costs and target more clients in industries spanning shoes, bags and luxury car upholstery. It also boosts Chief Executive Hariolf Kottmann’s drive to exit commodity chemicals and focus on more profitable areas like agrochemicals and ingredients for shampoos and moisturizers.
Clariant said the transaction could be finalized in 2014, and Wendel would remain the principal Stahl shareholder with a 70 percent stake. Clariant’s Leather business generated 266 million francs in reported sales and Ebitda before exceptional items of 24 million francs in 2012. The business employs 550 employees, mostly in Germany, India and Italy.
Third-quarter sales from continuing operations fell 3 percent to 1.4 billion francs, weighed down by the weakness of the Brazilian real, Japanese yen and Indian rupee against the Swiss franc. Earnings before interest, taxes, amortization and depreciation of 203 million francs met analyst expectations.
Clariant confirmed a target of sales growth in local currencies and a improved profitability for 2013.
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