Calgon Takes Large Europe Step With $163 Million Arkema Deal

  • Arkema selling activated carbon-and-filter-aid operations
  • Calgon sees at least 40% earnings boost from merger savings

Calgon Carbon Corp. agreed to acquire a carbon and filters business from France’s Arkema SA in a $163 million deal that marks the U.S. water purification company’s biggest step into Europe.

The supplier of filtering chemicals and additives is paying 9.5 times last year’s earnings for Arkema’s Activated Carbon and Filter Aid unit, which generates sales of 93 million euros ($105 million), the companies said in separate press releases. The sale, valued at a total 145 million euros, is expected to close in the fourth quarter.

“This planned acquisition would create a more balanced and diverse global platform,” Calgon Carbon Chief Executive Officer Randy Dearth said in a press release.

The transaction will expand the company’s presence in Europe, where it already operates under the name of Chemviron Carbon, with an engineering center in Belgium as well as three sites in the U.K. The U.S. accounted for more than one-half of Calgon Carbon’s revenue. The Pittsburgh-based company will fund the purchase through a combination of 137.7 million euros of cash, and debt.

Shares of Calgon rose 3.1 percent to $14.16 as of 9:50 a.m. in New York.

Calgon was founded to respond to a coconut shells shortage in the U.S. during World War II, as the material was used as a filtering agent for military gas masks. The company, then known as Pittsburgh Coke & Chemical Co., responded by developing a substitute using black coal, according to the company’s website. Pittsburgh was acquired by Calgon in 1965. Three years later, Calgon was acquired by Merck and Co. before being bought by management in 1985.

The Arkema deal includes six industrial sites in France and Italy supplying customers in the food, beverage, industrial and pharmaceutical industries. The U.S. company expects savings to improve the unit’s earnings by at least 40 percent by 2019.

Colombes-based Arkema aims to divest businesses with 700 million euros in sales between 2015 and 2017. Its shares fell 0.4 percent to 69.75 euros in Paris trading as of 10:54 a.m, giving the company a market value of 5.2 billion euros.

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