3 billion Evonik sells methyl acrylate business and publishes financial report

Eur3 billion Evonik's sales of methacrylate business in 2018 has achieved the expected performance steadily. Evonik, headquartered in Essen, Germany, and Anhong capital reached a cooperation agreement to sell the methacrylate business for eur3 billion. It is reported that the price (enterprise value) is 8.5 times the business's EBITDA. The deal is subject to approval by authorities in several countries and is expected to close in the third quarter of this year (2019). Evonik is an innovative industrial group from Germany. Its main core business, specialty chemicals, is in the leading position in the world. The core strategy of Evonik is to improve business profitability and maintain the continuous growth of enterprise value. Evonik's development benefits from its innovative strength and integrated technology platform. At the same time, Evonik operates in more than 100 countries around the world. In fiscal 2017, Evonik generated sales of about 14.4 billion euros and operating profit (adjusted EBITDA) of 2.36 billion euros. In addition, Evonik's international business is divided into six regions, of which North Asia is headquartered in Shanghai, China. In 2017, Evonik's sales in North Asia reached 2.158 billion euros.

Evonik regards China as one of the main drivers of global economic development, and strives to achieve continuous growth of its business in China. At present, there are about 3000 employees and 10 production bases in China. Achievements in strategy implementation, more stable performance in entrepreneurship, 2018 financial report and 2019 forecast of Evonik industrial group: achieve the expected target: adjusted EBITDA rises to 2.6 billion euros, sales increase 4% to 15 billion euros, 2019 Outlook: after adjustment, EBITDA decreases slightly or remains stable, free cash flow rises substantially The ester business sold for 3 billion euros, 8.5 times its EBITDA. It is understood that the deal will include methacrylate, acrylic products, cyplus product line and some methacrylic resin businesses. Evonik has decided to sell these businesses in order to implement its corporate strategy focusing on low cycle specialty chemical businesses. Anhong capital is one of the world's most experienced private investment companies in the chemical industry, which has invested in more than 30 chemical projects in the past 30 years. The difference between the selling price of the transaction and the net selling price (equity value) is about 500 million euros, which is mainly used for pension payment obligations. Evonik will use the proceeds from the sale to strengthen its financial position and invest in growth projects. This includes paying the consideration for the acquisition of peroxychem, which is scheduled to close this year.

In addition, the proceeds will be used to enhance the existing portfolio of specialty chemicals, such as the construction of a new polyamide 12 plant in Mal, Germany. These businesses all have good earnings and above average cash flow. In 2019, Evonik's strong free cash flow was sufficient to pay dividends even without the proceeds from the sale of its methacrylate business. In addition, Evonik is expanding its global footprint, producing soft polyurethane foam additives in Germany, the United States, China and other places, and establishing application technology centers in Brazil, Singapore and other places. Evonik is optimistic about the development of the Asia Pacific region, especially China, so it not only engages in production and R & D activities in Shanghai, but also establishes a strong technical service team to meet the diversified needs of customers with the industry's leading product analysis ability. It is reported that in September 2017, Evonik's new organic modified siloxane plant in Shanghai was officially put into operation in order to provide faster and more flexible support for Asian customers.