UK chemicals company Yule Catto has agreed to acquire its German rival PolymerLatex for €443 million (£376 million).
PolymerLatex, which makes a range of rubber-based products similar to Harrow-based Yule Catto’s, is currently owned by private equity house TowerBrook Capital Partners.
Under TowerBrook’s ownership, the company built a €60 million plant in Malaysia and created a new R&D facility near Dusseldorf, Germany.
Yule Catto expects the deal to generate cost savings in the region of £20 million. In 2009, PolymerLatex made earnings before interest, tax and depreciation of €34 million, on sales of €280 million.
The deal will expand Yule Catto's business in Europe and Asia through PolymerLatex's existing factories in Germany, Italy and Malaysia. It will also grow the UK company’s offering of polymers for the paint, construction, carpeting and adhesive industries.
The deal includes taking on €286 million of PolymerLatex’s debts, with Yule Catto planning to fund the acquisition through a four-for-three rights issue aimed at raising £225 million (approx. €265 million).
Malaysian multinational Kuala Lumpur Kepong, Yule Catto’s leading shareholder with a 19 per cent stake, will take up its rights in full.
TowerBrook Capital Partners’ other investments include the telecoms components manufacturer Dialogic and the fashion house Jimmy Choo.
