Pigments business to be merged with Heubach group / Current owner to hold 20% in combined company
The sale of its pigments unit marks the completion of Clariant’s restructuring programme (Photo: Clariant)
Clariant (Muttenz / Switzerland; has found three buyers for its pigments business, and one of them is itself. In an unusual deal construction, the speciality chemicals and plastics producer said it has reached a definitive agreement to merge the business with another pigment manufacturer, the German Heubach group (Langelsheim;, with the financial backing of US private equity investor SK Capital Partners (New York, New York;

Following completion of the transaction, expected in H1 2022, Clariant will have a 20% stake in the new company. The pigments business’ holding in InfraServ Höchst, the management company of the German chemical park at Frankfurt, is not part of the deal.

In financial terms, the agreement sets the value of Clariant’s pigments activities at CHF 805m to CHF 855m (EUR 739m to EUR 785m) on a cash and debt-free basis, roughly in line with the business’s CHF 850m annual sales. The sum is contingent on an earn-out payment of CHF 50m, based on the 2021 financial performance of the pigments assets. This represents a 10.7 to 11.4 standalone adjusted EBITDA multiple per April 2021.

Details have not been released about the ownership structure of the remaining 80% of the business, which has around 3,000 employees, more than EUR 900m in annual sales and service, and global production capabilities. It is also unclear if the private equity group plans to retain a stake over the longer term, as is whether the business will retain the Clariant name or take a new one. The Swiss group said that by reinvesting, it will be able to continue benefiting from the improving profitability generated by its efficiency programme, which started in 2018, while at the same time participating in future growth opportunities offered by expected synergies of the combined operation, which have also not been detailed.

The agreement to divest at least most of the pigments business is the final step in Clariant’s portfolio adjustments, said CEO Conrad Keijzer, adding that this will allow the group to fully focus on growing revenue and profitability of its core business areas of Care Chemicals, Catalysis and Natural Resources. As a high-value speciality chemicals player, he said it will have above-market growth, higher profitability and stronger cash generation.
The long road
Between the collapse of plans to merge with US chemical producer Huntsman and to establish a long-term plastics collaboration with Saudi chemical maker Sabic, the Swiss speciality chemicals group has been in an ongoing restructuring process. Management had initially hoped to sell the pigments business by 2020 and reportedly held talks with potential buyers, but it stopped the process on concerns over how the coronavirus pandemic might affect the selling price. Over the past two years, Clariant has also shed two other former core businesses, handing the masterbatch portfolio to US compounder Avient (Avon Lake, Ohio;, previously PolyOne, for EUR 1.4 bn (see of 19.12.2019). Also in 2019, it sold healthcare packaging operations to Arsenal Capital (see of 23.07.2019).

Speaking for the family owned Heubach group, CEO Johann Heubach said the planned merger with the Clariant pigments business represents a “major milestone” in its drive to promote consolidation in the pigments industry. In terms of industry-leading technologies, a product portfolio serving a wide range of customer requirements and global production and service footprint, “the fit is perfect,” he said.

Both companies regard themselves as leaders in the top-shelf pigments sector. Clariant’s business bills itself as a global provider of high-end organic pigments, and pigment preparations and dyes for the car industry, industrial and architectural coatings, and plastics. In 2020, the unit had 1,900 employees and reported sales of CHF 850m on a standalone adjusted basis.

Heubach, which can look back on more than 200 years of experience in pigments, is also globally focused as a producer of organic, inorganic and anticorrosive pigments and pigment preparations. Beyond its German headquarters, the company has production sites in the US and India, and sales offices around the world.
15.06.2021 1077 [247853-0]
Published on 15.06.2021
Heubach: Übernahme des Clariant-Pigmentgeschäfts mit SK CapitalGerman version of this article...

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