Clariant to Buy Lucas Meyer Cosmetics From IFF for $810 Million – WWD

PARIS ­– Swiss chemical substances firm Clariant has agreed to accumulate Lucas Meyer Cosmetics, maker of high-value energetic and purposeful cosmetics components, from Worldwide Flavors and Fragrances for $810 million.

The deal is equal to a 16.3-times a number of, primarily based on Lucas Meyer Cosmetics’ earnings earlier than curiosity, taxes, depreciation and amortization reported in August 2023. The transaction is predicted to shut within the first quarter of 2024.

“The proposed acquisition of Lucas Meyer Cosmetics marks one other main step ahead for Clariant’s purpose-led development technique. It’s going to strengthen our place as a real specialty chemical firm, our publicity in direction of client markets and our footprint in North America, whereas supporting our aim to speed up customer- and sustainability-driven innovation,” Conrad Keijzer, chief govt officer of Clariant, mentioned in a press release.

“As well as, Lucas Meyer Cosmetics brings a extremely skilled management workforce with a superb observe document,” he continued. “By combining our personal-care components portfolio with Lucas Meyer Cosmetics, Clariant will grow to be a frontrunner within the high-value beauty components house, probably the most engaging, worthwhile and fastest-growing specialty chemical substances markets. With this step, we are going to construct on our profitable observe document of pursuing and integrating bolt-on acquisitions to allow worth creation and worthwhile development.”

IFF mentioned in a separate assertion that money proceeds from the proposed transaction, internet of taxes and bills, is for use to cut back excellent debt.

“Per our announcement throughout our second-quarter earnings, we’re executing our portfolio optimization technique to strengthen our capital construction,” IFF CEO Frank Clyburn mentioned within the assertion. “Aligned with our best-owner mindset, the proposed sale of our beauty components enterprise to Clariant will enable us to deal with our core companies, maximizing development and returns.

“We’re satisfied that Clariant is the very best proprietor for the beauty components enterprise and with a capability to speculate, will provide the enterprise and our colleagues a vivid future,” he added.

IFF acquired Lucas Meyer Cosmetics in 2015 for about 283 million euros.

IFF’s beauty ingredient enterprise unit contains Lucas Meyers Cosmetics, based in 1999 and primarily based in Quebec, Canada, and IBR manufacturers. It operates six analysis improvement and/or manufacturing websites worldwide and has roughly 195 workers. Over the previous 12 months, the unit has had greater than 2,900 clients in over 80 nations.

“Lucas Meyer Cosmetics represents a big, thrilling development alternative for care chemical substances. It’s a good match with our enterprise, given the complementarity of our clients and merchandise,” mentioned Christian Vang, president of the Clariant enterprise unit care chemical substances and the Americas area. “Combining our respective strengths, together with the R&D and innovation capabilities of Lucas Meyer Cosmetics, backed by a robust model, will allow us to ship a robust improve in annual gross sales to $180 million in 2028 from round $100 million at present.”

Clariant mentioned Lucas Meyer Cosmetics’ enterprise is very cash-generative, attributable to its asset-light mannequin and outsourced manufacturing.

“As well as, Lucas Meyer Cosmetics has a singular customer-centric enterprise mannequin, leading to sturdy model recognition amongst clients world wide,” Clariant mentioned.

The group famous that each it and Lucas Meyer Cosmetics have complementarity of their buyer and product portfolio, geographic attain, and advertising and marketing and R&D capabilities.

The transaction must be accretive to Clariant’s earnings per share by mid-single-digits from the primary yr onward.

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