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July 5th, 2010
Brenntag to acquire EAC Industrial Ingredients
Brenntag acquires EAC Industrial Ingredients Ltd. A/S in Asia-Pacific
Brenntag today announced the purchase of 100% of the shares of EAC Industrial Ingredients Ltd. A/S (EAC II), from Copenhagen based The East Asiatic Company Ltd. A/S (EAC) which is listed on NASDAQ OMX Copenhagen. The purchase price is reported to be EUR 160 mn (DKK 1’200 mn) on a cash and debt free basis (Enterprise Value "EV" ca. 16 times EBITDA of ca. EUR 10 mn, respectively DKK 75 mn in 2009) and the deal is expected to close by the end of this month. The management team of EAC II will reportedly stay with the company.
EAC Industrial Ingredients has ca. 750 employees (2009 data) and operates a network of 27 locations in the nine countries Thailand, Vietnam, Indonesia, Philippines, Malaysia, Singapore, Cambodia, India and Bangladesh. The company serves ca. 8’000 customers. In 2009 sales were ca. EUR 181 mn (i.e. DKK 1’347 mn, x-rate DKK/EUR = 7.44) For 2010 Brenntag expects sales of about EUR 220 mn for EAC Industrial Ingredients.
The acquisition is being portrayed as a strategic investment for Brenntag in the Asia Pacific region, where growing demand is expected in particular for sectors like Food, Cosmetics, Pharma and Coatings. Brenntag already has significant assets in Asia Pacific with 17 sites in 11 countries and the acquisition of EAC will increase the number of personnel in the region to about 1,000. With the acquisition of EAC Industrial Ingredients, Brenntag is aiming to be one of the few companies operating in the whole region.
According to EAC the transaction does not include EAC’s portfolio investments in the three associated companies Akzo Nobel Paints (Thailand) Ltd, Asiatic Acrylics Company Ltd and Thai Poly Acrylics Public Company Ltd. The agreement with Brenntag concludes a thorough bidding process involving several serious industry players.
No merger control notification will be necessary with regard to the acquisition, according to Brenntag.
Sources: Brenntag web-site www.brenntag.com
EAC website www.eac.dk
EAC Industrial Ingredients web-site www.eacii.com
HGE-DCG / July 2010