Saint-Gobain: Acquisition of Chryso for a significant amount

  •   04/06/2021 - 08h08
  •   DEHOUI Lionel

Saint-Gobain continues to increase its acquisitions. It recently acquired Scientific and Production Company Adhesive in Russia. It then concluded the acquisition of a Romanian company specialized in the production of adhesives "Duraziv". Recently, Saint-Gobain continued this trend and signed an agreement to acquire Chryso.

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Saint-Gobain: Acquisition of Chryso for a significant amount

Details of the agreement and Chryso

Chryso is a company specialised in construction chemicals. The Chryso Group is one of the leading players in this market worldwide. Its activities are conducted with funds advised by Cinven, a global private equity firm. The fund's acquisition of Chryso dates back to 2017.

Four years later, Saint-Gobain has just signed the agreement to acquire the latter for an enterprise value of €1.02 billion. An amount that represents 12 times Ebitda, with Chryso's entire team of 1,300 people. The company, which was recently acquired by Saint-Gobain, generated sales of around €400 million in the last twelve months of its activity.

Its activity during this period resulted in an Ebitda of 85 million euros. However, Saint-Gobain will have to use cash from its completed divestments to finance the entire transaction.


The implications of the Chryso acquisition

Saint-Gobain expects this acquisition to generate shareholder value in year 3 and following the completion of the transaction. Indeed, the transaction is expected to generate over €15 million in cost synergies. This total is expected to be generated by taking into account Chryso's various operations within Saint-Gobain and particularly in purchasing.

In addition, further vertical integration as well as administrative and overhead cost savings will also be decisive in achieving these synergies. Similarly, the Chryso acquisition is expected to generate sales synergies of a considerable €35 million. This will be achieved through the expansion of a common sales platform already in the third year after the completion of the transaction.

All eyes of the shareholders are already on the second half of the year, when the building materials group will communicate again on this transaction.

Note: The acquisition agreement is expected to be completed in the second half of this year. However, this forecast is subject to the receipt of permission from the relevant competition authorities. It takes into account the completion of the information-consultation procedure with the legal employee representative bodies.


Saint-Gobain's outlook

The purpose of this new acquisition is well known to market experts who follow Saint-Gobain closely. It will mainly serve to strengthen its presence in the construction chemicals market. With a presence in about 66 countries, the group will be able to achieve a combined turnover of about 3 billion euros.

Saint-Gobain is thus continuing with its transformation policy. This new acquisition testifies to the strong strategic sense that has been driving the company for some time. The day after the announcement of the acquisition agreement, Saint-Gobain shares gained 1% on the stock market.