Israel Chemicals (TASE: CHIM) announced this morning that its ICL Performance Products unit had bought substantially all the business operations and the assets of the Industrial Water Treatment business unit ("HWT") of Henkel KGaA for €60 million (approximately $89 million). HWT will become a part of the ICL Performance Products segment, giving it annual revenue of approximately $1.1 billion (based on 2006 data).
HWT supplies water treatment chemicals, solutions, services and equipment especially for industry, including, inter alia, steel and coke production, power generation, metal-working, chemical, petrochemical, the food and beverage industries, where it has applications for cooling towers, power stations, boilers, drinking water and waste water treatment as well as water conditioning.
The company's main markets are Germany, France, Spain, Italy and Turkey. As part of this transaction, ICL will acquire the shares of Henkel Concorde, a French company that is active in the water treatment field.
HWT employs approximately 180 people in sales, service, R&D and in the production plant in Henkel Concorde. As a result of the acquisition ICL will employ most of these employees. Within Henkel’s portfolio the water treatment business is a non-core activity.
In 2006, the business unit had sales of €52 million (about $77 million), gross margin of approximately 53% and operating margin of approximately 13%, all based on un-audited data.
Israel Chemicals said it was financing the purchase from its own resources and from existing bank credit lines. It says it intends to integrate HWT into the water treatment business of ICL Performance Products with the goal of realizing operating synergies in the purchase of raw materials, complementary products and geographical markets.
According to Israel Chemicals, the acquisition will expand ICL Performance Products’ offerings of water treatment products, application know-how and solutions while also enhancing its geographic marketing reach, and will enhance ICL Performance Products’ R&D capabilities through the addition of advanced water treatment technology and intellectual property.
Israel Chemicals shares are down 2.9% so far in today's session on the Tel Aviv Stock Exchange.
Published by Globes [online], Israel business news - www.globes.co.il - on January 13, 2008
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