Sika makes an offer to buy Parex Industrie-Negoce News

Sika, a Swiss specialty chemistry group, has made a firm offer to acquire Parex, the leader in mortar solutions, from its current owner, CVC.

After being coveted for a long time by the Saint-Gobain group, the industrialist Sika is now under attack. It proposes CHF 2.5 billion to acquire the competitor Parex, a leading manufacturer of mortar solutions, including facade mortars, tile adhesives, waterproof and technical mortars.

Parex was sold in 2001 by the Lafarge Group to three investment funds, including CAC. In 2018, the company achieved revenue of 1.2 billion Swiss francs and expects EBITDA (profit before taxes and taxes) of approximately 195 million Swiss francs.

According to the Sika press release, Parex has a local presence in 23 countries with key positions in 8 main geographical areas and operates 74 plants worldwide.

With this acquisition, Sika indicates that it will further strengthen its leading position in the construction chemicals and industrial adhesives sector and will achieve sales of more than 8 billion Swiss francs.

Construction of a heavy vehicle on the mortar business

Thus, according to the Group, Sika's mortar business, a key growth technology for the group and one of its main sources of profitability, will more than double in volume to reach 2.3 billion Swiss francs, or 2 billion euros, with the transaction.

Parex's strong position in the distribution channels will open up new business opportunities for the Sika product range, the press release says. For its part, Parex will have access to Sika's direct sales channels and Parex's expertise in facades and tiles will enable Sika to participate in these attractive and growing markets.

"the excellent work of Parex in the field of facades can be used throughout the Sika world," says Paul Schuler, managing director of Sika.

Expected synergies of 80 to 100 million Swiss francs

The annual synergies are expected to be in the range of Sfr80 million to Sfr100 million, says Sika. The acquisition price is 11.3 times the ratio "EV (company value) / EBITDA proforma 2019 (profit before taxes)" which will be reduced to less than 8.5 times "EV / EBITDA", including full yield synergies.

Finally, it should be noted that the implementation of the operation is subject to consultation of the French works councils (CSE) and regulatory approvals, expected in the 2nd / 3rd quarter of 2019.

Source: batirama.com / F. Leroy