June 26 (Bloomberg) -- Elementis Plc, the specialty chemical maker born out of British tea-trader Harrisons & Crosfield, agreed to acquire Watercryl Quimica Ltda. of Brazil for $24 million to expand in the Latin American market for coatings additives.
Watercryl generated sales of $9.3 million and earnings before interest, taxes, depreciation and amortization of $2.3 million in the year through May, and the deal is expected to close in the second half, the London-based company said in a release today. Elementis shares climbed 2.7 percent to 193 pence as of 8:49 a.m. local time.
Elementis will combine Watercryl with its existing Specialty Products offering to accelerate growth in Latin America. The company is seeking out other investment opportunities to pursue expansion in high-growth markets, Chief Executive Officer David Dutro said in the release.
“This acquisition represents significant progress in extending our reach into the fast growing and increasingly sophisticated Latin America coatings market,” Dutro said.
The purchase price implies a multiple of 10.4 times Ebitda, compared with a median ratio of 7.19 for specialty chemical deals in western Europe over the past six years, according to data compiled by Bloomberg.
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