By Liz White, UT contributing editorAmsterdam, The Netherlands-Royal DSM NV announced 14 Dec that it intends to acquire the NeoResins coating resins business of Avecia during the first quarter of 2005, for Euro 15 million. "The acquisition fits perfectly in DSM's strategy and means a substantial strengthening of DSM's coating resins business," said a DSM statement on the deal. DSM will buy the entire NeoResins business-which makes polyurethane and acrylic resins with a focus on waterborne materials-on a cash basis, and debt free. NeoResins' sales in 2004 are expected to be around Euro 270 million with an EBITDA of approximately Euro 52 million. The company employs 635 people. The Dutch firm said it expects the acquisition to add to its earnings immediately. DSM added that NeoResins is "a well-managed business enjoying high growth (around 6 percent) and high profit margins in attractive markets." Its growth in resins for paints, coatings adhesives and inks is "driven by increasing industry and consumer demand for environmentally friendly coating technologies," DSM added. "With an EBITDA / sales margin of 20 percent, NeoResins will contribute immediately to DSM's earnings per share and profitability," commented Peter Elverding, DSM's chairman, in the company statement. The expanded DSM resins business "will be an innovative and leading producer in the market of environmentally friendly coatings and resins," he added. NeoResins will form part of DSM Coating Resins and will trade as DSM NeoResins. The acquisition "will add technically very advanced resins to DSM Coating Resins' portfolio," the firm added. DSM Coating Resins said it will look for synergies in technology, markets, innovation and purchasing following the purchase. "It is exactly the kind of acquisition DSM was looking for to finalise the portfolio transformation envisaged in our Vision 2005 strategy. It is an excellent fit since it will strengthen DSM's Performance Materials portfolio and increase our presence in high-growth specialties," Elverding said. "
