Acquisition of Kerneos by Imerys
FR
Sycomore Corporate Finance acted as financial advisor to Kerneos and its management
Less than two years after S&B’s acquisition, Imerys takes a further step in its development strategy with the acquisition of Kerneos. With this operation, the Group would again enhance its specialty offering in high-potential markets and improve its growth and profitability profile while creating value.
Thanks to its expertise in calcium aluminate technologies, Kerneos develops performance binders that contribute key properties (rapid hardening, self-leveling, sealing and wear, corrosion or heat resistance), to its customers’ innovating solutions for construction (screed and adhesive tiles mortars, etc.), civil engineering (sewage system infrastructure, etc.) or refractories (protection of blast furnaces, thermal power plant, etc.) sectors.
With an access to quality mining reserves and resources, a global sales network, 9 high-performance production sites in 5 countries and great innovation capability, Kerneos fits perfectly with Imerys’ business model and has a sound history of growth and profitability.
Finally, the acquisition project of Kerneos, would be in full compliance with Imerys’ external growth criteria. It would have a positive impact on net income from current operations per share from the first year of consolidation and would rapidly create value thanks notably to synergies estimated at €23m. The transaction, entirely funded by the Group’s available resources, would maintain Imerys’ financial soundness and complies with its goal of keeping an investment grade credit rating.
Rationale
Founded in 1908, Kerneos is a France based company engaged in the production and sale of calcium aluminate binders. Over the past three years, Kerneos has achieved annual average sales growth of +3.3%, of which +7.1% organic growth in construction technologies. With operations in Europe, North America and emerging countries, and 1,500 employees, Kerneos posted consolidated revenue of €415m over the last 12 months as of September 30, 2016. Over the same period, EBITDA grew +8.0% to almost €100m, while current operating cash flow totaled €74m before tax, i.e. 18% of revenue.
Founded in 1880, Imerys (Euronext) is a France-based company engaged in the extraction and processing of minerals. Imerys delivers high value-added, functional solutions to a great number of sectors, from processing industries to consumer goods and building products.
Active in over 50 countries with 258 industrial sites, Imerys achieves one quarter of its revenue in North America and less than 50% in Western Europe with €4bn revenue and 16,000 employees.
Astorg is an independent private equity group with over €4bn of assets under management.
Since its inception in 1998, Astorg has conducted 40 transactions, generating an annualised rate of return of 27.5%, with a minimal loss rate of less than 1.3% of all capital invested.
Its offices are located in London, Paris and Luxembourg. Astorg acquires European companies with a global presence and sales.