18th Nov 2020 08:40
(Alliance News) - Croda International PLC on Wednesday said it has agreed a deal to buy a Spanish flavours and fragrance firm for EUR820 million, and outlined plans for a bumper equity placing to partly fund the buy.
The speciality chemical company struck a deal to buy Fragrance Spanish Topco SL, which trades as Iberchem, for EUR820 million. The Murcia-based firm employs about 850 people and has a commercial presence in 120 countries, Croda noted.
"Approximately 80% of its sales are fragrances for Personal Care and Home Care products, areas where it has a similar customer profile to Croda," the company explained.
Croda added that roughly 20% of Iberchem's sales come from its Scentium flavours business, "principally for food, pharmaceutical and oral care applications".
Croda Chief Executive Officer Steve Foots said: "Our expansion into the fast-growing fragrances and flavours market further increases our exposure to Consumer Care markets and adds another exciting growth adjacency to Croda's market-leading position."
From 2021, Croda will establish a Consumer Care arm, to sit alongside its Life Sciences, Performance Technologies and Industrial Chemicals units.
"The Consumer Care sector will comprise the current Personal Care business, the Home Care business unit which currently sits within Performance Technologies, and Iberchem," Croda explained.
The Iberchem deal will be funded by existing debt facilities and a placing equivalent to 8% of its existing shares.
The equity raise, conducted through an accelerated bookbuild run by Morgan Stanley and HSBC, will net Croda about GBP600 million. In addition, there will also be a retail offer through the PrimaryBid platform.
Turning to current trading, Croda said its outlook for the full-year remains unchanged after an in-line performance in the second half so far. The full-year charge for group-wide share-based payment schemes is forecast to be higher than previously expected, it noted, due to recent share price performance.
Croda added: "Core Business constant currency sales for the period were 1% above the prior year, excluding the impact of acquisitions, with a steady month-on-month recovery in both consumer and industrial markets."
By unit, Personal Care saw a 5% fall, as did Performance Technologies. Life Sciences posted 18% growth.
Croda shares were 1.7% higher at 6,186.00 pence each in London on Wednesday morning, one of the best blue-chip performers.
By Eric Cunha; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Croda International