Croda acquires Sipo to boost emerging market expansion
As per the deal, the UK-headquartered firm will gain a 65 per cent equity interest in the non-listed natural specialty chemicals manufacturer, subject to customary closing conditions.
"This is a significant step forward in our strategy to increase Croda's presence in fast growing and emerging markets,” says Steve Foots, chief executive of Croda.
“We will have a stronger platform in niche markets and renewable technologies which will allow us to develop our customer base and drive sales growth in Asia,” he adds. “Our broader footprint in China will also enable us to be more responsive to customer needs in this important region."
Strengthening
In 2012 Sipo reported a turnover of £28.0m ($45.1m), having invested in a custom built production facility the previous year; which will provide additional capacity and increase Croda's proximity to customers in the region from the outset, strengthening its existing operations across China and the Group's overall position in Asia.
“Sipo's manufacturing capabilities together with our marketing expertise and sales force infrastructure are an exciting combination,” comments Foots.
The new acquisition will also consolidate the Nivea supplier’s global leadership in fatty acid amides and add new technology that will enable the Group to expand its portfolio across a number of its core markets.
Apart from a small number of by-products, all of Sipo's products will be sold through the Croda global sales network, with the initial focus to grow sales from its Performance Technologies business to the Polymer Additives and Lubricants sectors.
All in the details
The majority stake will be acquired from Sichuan Forever Holding Co. and certain individual shareholders for a total consideration of £38.2m ($61.5m), including £8.0m of debt. Sichuan Forever Holding will continue as the minority shareholder retaining a 35 per cent equity interest in Sipo.
The Mianyang City-based chemicals firm was established in 1993 and has approximately 300 employees, making specialty derivatives from natural raw materials, with products including primary amides, novel fatty acids and specialty esters.
