London - Additives supplier Elementis plc is to purchase Taiwan-based additives and resin supplier Deuchem Co. Ltd for £40.4 million ($80.3 million or TW$ 2464 million).
Deuchem, which has been in business since 1978, supplies of additives and resins to the coating and related industries. It supplies acrylic and polyester polyols and UV curing oligomers, as well as blocked isocyanates, and a wide range of antifoaming and dispersing agents and other additives, for use in paints and coatings, printing inks, natural and synthetic leather finishes and composites.
The additives supplier has three sales offices in Taiwan and eleven sales offices in China. Its manufacturing and technical facilities are near Taipei and in Shanghai. Deuchem's sales in 2007 were £37.9 million, with before-tax profits of £5.1 million.
"The acquisition of Deuchem will significantly expand Elementis' presence in Asia and provide a platform for its Specialty Products Division to accelerate growth in the region," said UK-based Elementis, in a 28 April announcement.
Describing the deal as "a significant step in the evolution of Elementis," David Dutro, Elementis' chief executive officer said, "Deuchem has a strong presence in Asia in terms of its commercial team, technical organisation, and manufacturing group, and when combined with the Elementis infrastructure provides an enviable platform to drive growth."
In 2007, Deuchem's revenue grew by about 6.5 per cent, which Elementis said is consistent with its own 2007 performance in Asia Pacific.
Elementis said that growth in the combined businesses will also be driven by the sale of Deuchem's products to Elementis' global customers, and by selling Elementis products through Deuchem's well established sales and technical support network in China and Taiwan.
Elementis Specialties produces additives and pigment dispersions for awide range of industries, including the coatings, inks, adhesives andconstruction sectors.
The transaction, subject to regulatory approvals, should close in the second half of 2008. Elementis said the purchase price assumes that Deuchem will have debts of up to £1.3 million at closing.
Greg McClatchy, president of Elementis Specialties, will head the combined organisation.