Adhesive manufacturing company Covestro (Pittsburgh, Pennsylvania, USA) has acquired the resins and functional materials (RFM) business from Royal DSM (Heerlen, Netherlands). Under the terms of the agreement, Covestro will pay 1.61 billion euros (1.9 billion USD) that will be financed through a combination of equity and debt instruments.
With the acquisition of the RFM business, Covestro expands its sustainable coating resins portfolio and helps fulfill the company’s long-term strategy to strengthen its sustainable and innovation-driven businesses. In addition, it adds about 1 billion euros (1,175,822,084 USD) and an earnings before interest, taxes, depreciation, and amortization (EBITDA) of 141 million euros (165,787,350,119 USD). Finally, the integration of the RFM business is expected to expand revenues of Covestro’s coatings, adhesives, and specialties segment by more than 40%.
“This acquisition is an important step for our corporate strategy,” says Dr. Markus Steilemann, CEO of Covestro: “RFM enhances the growth trajectory of our business. By combining our strong innovation capabilities, sustainable product portfolios as well as complementary technologies and customer industries, we will unlock significant value. At the same time, it is also a key step to drive innovation for the transition towards a circular economy.”
According to Covestro, it will add a complete range of water-based polyacrylate resins and expand its technology portfolio to include water-based hybrid technologies, powder coating resins, and radiation curing resins. In addition, the company will leverage established RFM brands such as Niaga, as well as additive manufacturing and advanced solar coating products.
With their shared commitment to environment, social, and governance (ESG) criteria, both Covestro and Royal DSM will have an excellent and complementary research pipeline, particularly as it relates to sustainable, high-performance raw materials for the coatings industry. According to Covestro, this will make the company a leader in the coating resins market, as well as a more attractive research and development partner for its customers.
“The acquisition is strategically and financially a perfect opportunity for us to pursue our long-term growth strategy at highly attractive conditions and tangible synergies,” says Dr. Thomas Toepfer, Covestro chief financial officer and labor director. “With the chosen financing structure, we are striking the right balance between equity and debt. We look forward to welcoming our new colleagues under the Covestro roof soon. Together, we will work towards bringing our joint potential to life.”