US-based Taminco Corp said it had inked a definitive deal to purchase Finland-based Kemira's formic acid business in a deal worth $190 million or €140 million. Taminco is the largest integrated producer of alkylamines and alkylamine derivatives in the world. The company's products are utilized in making products used everyday for the water treatment, agriculture, personal and home care, gas and animal nutrition end-markets.
A global chemicals company that focuses on serving customers in water-intensive industries, Kemira posted annual revenues of €2.2 billion last year. Its products and expertise enhance the water energy and raw material efficiency of its customers.
In a statement, Taminco said the formic acid business of Kemira has earnings before interest, taxes, depreciation and amortization EBITDA of about €23 million or $32 million. The acquisition deal also includes the formic acid and derivatives manufacturing facility in Oulu, Finland as well as the unit's 160 employees in Finland, Germany, the Netherlands, US and Brazil. The boards of directors of both companies have approved the agreement and the deal is set to be completed in the first quarter of next year after the customary closing conditions have been met.
Taminco said that its entry into the formic acid market furthers their long term strategy of investing in niche businesses that have robust outlooks and high-potential end markets. It is also an implementation of their plan to make investments in businesses that share similar core competencies as their company. The purchase will be funded through a combination of cash on hand and committed financing, the statement said. It is also expected to generate substantial value for both companies as the parties have agreed to sign several long term supply and service deals after the transaction has been completed.
Taminco Chief Executive Officer Laurent Lenoir said in the statement, "As a leading specialty chemical producer, Taminco is excited to advance its long term, ongoing strategy of expansion into key markets through the addition of high quality, niche businesses. Our entry into the formic acid space is an opportunity to leverage our existing skill-set to expand into attractive new product lines, as well as achieve numerous synergies that will continue to optimize value for all of our stakeholders."
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