Eckart buy brings Altana split closer
pharmaceutical and chemicals company Altana, has said it plans to
acquire Eckart for €630 million in cash, in what is the largest
purchase in the company's history.
The acquisition also marks a step forward in Altana's plan to split its pharma and chemicals activities into two separate companies.
Nikolaus Schweickart, president and chief executive of Altana, said: "With its global presence in attractive specialty markets, our chemicals division is now positioned in such a way that it will make sense to separate it as an independent and listed company."
Eckart is a specialist in pigments used in plastics, cosmetics, graphic arts and coatings, and will sit well alongside Altana's activities in additives, specialty coatings, sealing and casting compounds, electrical insulation material, impregnating agents and instruments for testing and measuring.
The combination of Eckart and Altana Chemie will have a market capitalization of €1.8-€2.0 billion, bigger than that of Lanxess, the chemical business spun-out by Bayer at the beginning of the year. The new Altana Chemie will have annual sales of €1.2 billion and an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of around 20 per cent, up from €854 million in 2004 and a 19 per cent EBITDA margin.
The acquisition of Eckart is expected to be earnings accretive from the second full year of business, with a transaction close scheduled for the fourth quarter of 2005.
Eckart employs 1,850 people worldwide and reported sales of €302 million in 2004, with an operating profit of €65 million. It is "one of the most profitable specialty chemicals companies worldwide," with an EBITDA of 21 per cent, according to an Altana statement.
Pharma will be strengthened
Schweickart also said that further strengthening of the pharmaceuticals division will be achieved through its development of new innovative products, as well as by means of acquisitions, cooperations and alliances.
"For that end, an amount of more than €1 billion is available to the company, partly through the mobilisation of non-core business segments," he added.
Meantime, Altana has also reported its first-half 2005 results, which showed that turnover increased 5 per cent to €1.55 billion and pretax earnings were up 12 per cent at €352 million.
Altana Pharma's sales rose 9 per cent to €1.1 billion, with earnings before taxes up 19 per cent to €312 million boosted by a payment resulting from the termination of a collaboration on respiratory disease drug Daxas (roflumilast) with Pfizer.
Altana Chemie's sales came in at €422 million in the first six months of 2005, although pretax earnings fell 17 per cent to of €54 million, hit by raw materials costs and a reorganisation of its coatings and sealants business.
