Acquisition

28th Apr 2008 11:10

Elementis PLC28 April 2008 Elementis - Acquisition of Deuchem Co., Ltd. Elementis plc today announces that it has agreed, through its wholly ownedsubsidiary Elementis Holdings Limited, to purchase Deuchem Co., Ltd.("Deuchem"), a Taiwan based company, for a cash consideration of £40.4 million(TW$ 2,464 million). Deuchem was established in 1978 and is a leading supplier of additives andresins to the coating and related industries, with three sales offices in Taiwan and eleven sales offices in China, together with manufacturing and technical facilities near Taipei and in Shanghai. The acquisition of Deuchemwill significantly expand Elementis' presence in Asia and provide a platform for its Specialty Products Division to accelerate growth in the region. In 2007, Deuchem's revenue grew by approximately 6.5 per cent, which is consistent with the Elementis 2007 Asia Pacific performance. Further growth in the combined businesses will be driven by the sale of Deuchem's product portfolio to the Elementis global customer base, as well as the opportunityto sell Elementis products through the well developed Deuchem sales and technical support network in China and Taiwan. The transaction is subject to regulatory approvals and the purchase priceassumes that Deuchem will have debt of up to £1.3 million at closing. Closingis anticipated to take place during the second half of 2008 and the transaction is expected to be earnings enhancing for Elementis in the first full year of ownership. Greg McClatchy, president of Elementis Specialties, will head the combinedorganisation. Deuchem's audited results for the year to December 31, 2007 are as follows: Sales £37.9 mProfit before tax £ 5.1 mProfit after tax £ 3.6 mEBITDA £ 5.7 m Gross assets £36.1 m David Dutro, Elementis' Chief Executive Officer, said "This acquisitionrepresents a significant step in the evolution of Elementis and our commitmentto profitable growth in Specialties. Deuchem has established an impressivereputation over the past thirty years for technical service and productdevelopment, and is therefore an excellent fit with our Specialty ProductsDivision. Listening to customers' needs and working to meet them is a philosophy that Deuchem and Elementis share. Deuchem has a strong presencein Asia in terms of its commercial team, technical organization, and manufacturing group, and when combined with the Elementis infrastructure provides an enviable platform to drive growth. Deuchem's complementary productportfolio, customer service culture, and the opportunity to leverage combined technologies globally gives us confidence that this acquisition will create shareholder value." Notes: 1) Elementis is acquiring Deuchem from Antony Chang (Chairman and CEO ofDeuchem), who is the largest shareholder, and from four other directors as wellas a number of other private shareholders, including employees who will remainin the business.2) Deuchem's senior management, with the exception of Antony Chang, is expectedto be retained.3) Exchange rate used: £1 = TW$ 61. Enquiries: Elementis plc Tel: +44 (0)20 7408 9302David Dutro, Group Chief ExecutiveBrian Taylorson, Finance Director Financial Dynamics Tel: +44 (0)20 7831 3113Andrew DowlerGreg Quine This information is provided by RNS The company news service from the London Stock Exchange

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