Saturday, November 28, 2020

Croda swoops for Spanish fragrances & flavours business

Croda International, the speciality chemical company headquartered in Goole, is acquiring Iberchem, a Spanish fragrances and flavours company, for £736 million.

Iberchem was founded in 1985 and is headquartered in Murcia, Spain and has been majority owned by Eurazeo since 2017. Approximately 80% of its sales are fragrances for Personal Care and Home Care products, areas where it has a similar customer profile to Croda.

Croda said the deal supports its ‘Purpose of using Smart Science to Improve Lives’. It also helps drive the Group’s strategic objectives by focusing on faster growing core consumer markets, adding a new, high-growth adjacency to its existing Personal Care and Home Care businesses.

The consideration will be funded via a combination of the Group’s existing debt facilities and the proceeds of an equity placing, representing 8% of Croda’s issued share capital.

The placing of new ordinary shares in the capital of the Company to institutional investors is expected to raise net proceeds of £600 million. The Placing is being conducted through an accelerated bookbuild which will be launched immediately following release of this announcement.

In addition to the Placing, there will be an offer made by the Company on the PrimaryBid platform of new ordinary shares in the capital of the Company at the Placing Price to provide retail investors with an opportunity to participate.

On completion, Croda’s leverage is expected to increase modestly to approximately 2 times EBITDA and is expected to reduce to 1.6 times EBITDA by the end of 2021, with the structure of the financing preserving the Group’s robust financial flexibility and balance sheet strength.

The acquisition is expected to close by the end of 2020.

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