British chemicals company Croda has confirmed a deal to buy Spanish company Iberchem for €820 million as they attempt to corner the fragrance and accessories market.
Croda partially funded the venture through an equity placing representing 8% of its issued share capital and by drawing on existing debt facilities.
Last week, the company secured a contract to supply ingredients for Pfizer's new Covid vaccine, which has been performing well during clinical tests.
They hope the deal with Iberchem will help them, break into the fragrances market regarding shampoos, cosmetics and scented products in key markets such as China and the Middle East.
The acquisition caused shares in Croda to jump by 3% to a 21% rise this year alone. The company are already listed on the FTSE 100 index.
Steve Foots, CEO of Croda said: "Our expansion into the fast-growing fragrances and flavours market further increases our exposure to consumer care markets."
Iberchem's private equity owners Eurazeo will receive €565 million from the deal - owing to their majority stake, which they secured in 2017 - a little more than half of the total cost Croda paid for the acquisition.
The deal is also set to increase Croda's earnings in their Q1 2021 report but ROI could be delayed by several years, according to analysts.
Foots added his company considered buying Iberchem four years ago and even came close to buying a rival in the sector after initial plans were scrapped.
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