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(Updates with more details, adds third-quarter earnings)
ZURICH, Oct 30 (Reuters) – Switzerland-based Clariant AG said on Monday it had acquired Canada’s Lucas Meyer Cosmetics from International Flavors & Fragrances in an all-cash deal for $810 million.
Clariant said the deal for the Quebec maker of ingredients for cosmetics and personal care products would strengthen its position in North America and its exposure to consumer markets.
The deal came as Clariant, whose products are used to make de-icers, food ingredients and skin and health care products, reported a fall in both its third-quarter sales and core operating profit in what it called a challenging market.
Several European chemicals makers have slashed their annual outlooks over the last few months amid muted consumer demand, destocking by clients and weak pricing for commodity chemicals.
“By combining our personal care ingredients portfolio with Lucas Meyer Cosmetics, Clariant will become a leader in the high value cosmetic ingredients space, one of the most attractive, profitable, and fastest-growing speciality chemicals markets,” Chief Executive Conrad Keijzer said in a statement.
Clariant said it wanted to increase annual sales at Lucas Meyer to around $180 million by 2028 from $100 million at present, after completing the deal in the first quarter of 2024.
It said Lucas Meyer, which makes ingredients for cosmetics, was accretive to Clariant’s growth, sales and cash flow. The price represented an enterprise value to EBITDA multiple of 16.3, Clariant said.
For the three months to the end of September, Clariant said sales fell 21% to 1.03 billion Swiss francs ($1.14 billion), while core operating profit (EBITDA) was 28% lower at 159 million francs.
Analysts had expected sales of 1.05 billion francs and profit of 145 million, according to a company-gathered consensus forecasts.
Clariant said the economy was unlikely to recover in the last three months of 2023, even as it expects inflation to ease. It, however, confirmed its full year guidance, saying it expects 2023 sales of 4.55 to 4.65 billion francs and EBITDA of 650 to 700 million francs. ($1 = 0.9027 Swiss francs) (Reporting by Gokul Pisharody in Bengaluru and John Revill; Editing by Nivedita Bhattacharjee and Miranda Murray and Miral Fahmy)
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