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IFF’s microbial control business to be acquired by LANXESS

Aug 26, 2021
IFF’s microbial control business to be acquired by LANXESS

Cologne

Taking another big step on its growth course, LANXESS has acquired the microbial control business of the US group International Flavors & Fragrances Inc. (IFF). IFF Microbial Control is known for supplying antimicrobial active ingredients and formulations for material protection, disinfectants, and preservatives. Hygiene solutions from IFF Microbial Control are used in functional textiles.

As per the statistics, IFF microbial control business has sales of $450 million and EBITDA of around $100 million. LANXESS is expecting synergies to add $35 million in EBITDA. According to Matthias Zachert, Chairman, the Board of Management of LANXESS AG, in 2021, all signs are pointing towards the growth of the company. He said that the acquisition of IFF Microbial Control is the fourth one in this year and LANXESS’ is the second-largest ever. As per him, the business of LANXESS complements the strategic planning of the company. This is going to make LANXESS one of the world’s largest suppliers of microbial control products. The company is also planning to enhance Consumer Protection so that it can become the strongest segment in the Group.

For this acquisition, LANXESS is going to pay around $1.3 billion. According to Michael Pontzen, CFO, LANXESS, the company is achieving an attractive purchase price of 9.6 times EBITDA, if the synergies are taken into account. Debt capital will be used to finance the purchase price. The respective bridge financing has also been secured for this purpose, he said. He also said that this bridge financing will be replaced by corporate bonds in the capital market in the coming months. The company wants to maintain its solid investment grade rating as well.

According to Michael Schäfer, Head, the Material Protection Products business unit, because of all other acquisitions, the company has been able to maintain its position as a microbial control solutions provider. With IFF’s microbial control business, the company is planning to expand its portfolio which will help it to offer additional application-oriented solutions to its customers.

Source – Press release of "LANXESS"

Image Source: Press release of "LANXESS"

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