Jul 15 2008
Specialty chemicals supplier Cognis has signed an agreement to sell its Pulcra Chemicals subsidiary to Germany-based Fashion Chemicals GmbH & Co. KG for 26.3 million euros. The sale is in line with Cognis’ strategy of focusing on its core businesses driven by the wellness and sustainability trends. Agreements respecting the transfer of the business and related transactions were signed today in Düsseldorf, Germany.
Cognis will sell its Pulcra Chemicals subsidiary to Fashion Chemicals GmbH & Co. KG (“Fashion Chemicals”), an investor backed mainly by DSD Deri Sanayicileri Dis Ticaret A.S (“DSD”), based in Istanbul, Turkey, an organization with excellent connections within the leather goods industry. The stakeholders of DSD include leading tanneries and leather manufacturers.
The cash proceeds from the transaction will amount to 26.3 million euros. Approximately 9 percent of the cash proceeds will be financed by members of Pulcra Chemical’s senior management team. Fashion Chemicals additionally took over 15 million euros of financial liabilities (including debts and pensions). The final transaction is subject to usual closing conditions including regulatory approvals and is expected to be completed by the end of October 2008.
Pulcra Chemicals, which supplies process chemicals to the textile and leather industries, was previously the Process Chemicals strategic business unit (SBU) of Cognis. The SBU was carved out into separate legal entities on July 1, 2007, and renamed Pulcra Chemicals. Pulcra operates production sites and service centers in Brazil, China, Germany, India, Indonesia, Italy, Mexico, Spain, Turkey and the USA. In 2007, Pulcra Chemicals reported external sales of 246 million euros.
Antonio Trius, CEO of Cognis, comments: “We are sure that Fashion Chemicals supported by DSD with its deep understanding of market requirements is an excellent fit and will help Pulcra Chemicals to develop its business successfully as well as safeguard its long-term competitiveness. This transaction will enable Cognis to consistently focus on its innovation-driven growth markets of wellness and sustainability.”
“We are delighted to gain an investor to support us on building up our core business,” says Yusuf Aktalay, CEO of Pulcra Chemicals and CEO-designate of Fashion Chemicals GmbH & Co KG. “With over 125 years of experience, we have an in-depth knowledge of both the regulatory environment in our key markets and also the prevailing trends relating to health and safety, ecological sustainability and wear comfort. We are therefore well placed for operational success as we move forward.”