EAC has entered into an agreement to divest EAC Industrial Ingredients to
Brenntag Holding B.V. for a total consideration of DKK 1.2bn on a cash and debt
free basis (“Enterprise Value”). EAC upgrades its full-year outlook to an
operating profit around DKK 700m. The proceeds provide EAC with an optimum
platform to accelerate growth in its remaining business units. A telewebcast
will be conducted today at 11 AM CET.
EAC has entered into an agreement with the German Brenntag group to divest EAC
Industrial Ingredients for a total consideration of DKK 1.2bn on a cash and
debt free basis (“Enterprise Value”) corresponding to DKK 0.9bn in equity
value. The transaction does not include EAC's portfolio investments in the
three associated companies Akzo Nobel Paints (Thailand) Ltd, Asiatic Acrylics
Company Ltd and Thai Poly Acrylics Public Company Ltd.
The transaction is implemented as a sale of shares on customary terms. For EAC
the agreement results in a profit over book value of around DKK 500m. The
transaction will not give rise to taxation. Consequently, EAC upgrades its
full-year outlook to an operating profit around DKK 700m.
The strategic rationale for the sale is to ensure that the EAC Group as well as
EAC Industrial Ingredients can realise their full potential. EAC pursues - and
will continue to pursue - a strategy rooted in the growth strategy of each of
its businesses operating in high-growth markets. EAC views profitable growth
as a prerequisite for success in these individual businesses, and acquisitions
are crucial in order to meet EAC's strategic growth objectives.
However, during the recent years of global economic downturn EAC's growth
through acquisitions in Asia has not reached the desired scale. At the same
time it is clear that following Asia's recent strong emergence from the general
economic downturn, a new wave of global consolidation is taking place in most
industry sectors, including those of Industrial Ingredients. The inevitable
entry into the Asian markets by global chemical distributors will increase
competition for desirable acquisition targets and further reduce EAC
Industrial Ingredients' potential for continued growth.
The decision to sell EAC Industrial Ingredients at this time and at a premium
price provides EAC with significant resources to focus on the exploitation of
the full potential in the remaining two business units. EAC considers the
opportunities to create value and growth within its remaining business units
numerous and attractive. EAC's growth strategy will include a significant
expansion of the Group's geographical reach in order to rapidly recapture the
scale and profit given up with the sale of EAC Industrial Ingredients.
The agreement with Brenntag concludes a thorough bidding process involving
several serious industry players. EAC regards the price as highly satisfactory
to EAC and its shareholders and considerably in excess of the probable value
that could be created through continued ownership by EAC.
Brenntag being a global market leader in full-line chemical distribution will
provide EAC Industrial Ingredients with new growth opportunities, and the
company has sharp focus on further development and growth of the business to
the benefit of EAC Industrial Ingredients' employees, suppliers and customers.
A telewebcast on this announcement will be conducted today at 11 AM CET. For
further information regarding dial-in etc., see EAC's website: www.eac.dk
Yours sincerely,
The East Asiatic Company Ltd. A/S
Henning Kruse Petersen Niels Henrik Jensen
Chairman of the Supervisory Board President & CEO
For additional information, please contact:
President & CEO Niels Henrik Jensen
+45 3525 4300
nhj@eac.dk
Group CFO Michael Østerlund Madsen
+45 3525 4300
mom@eac.dk
www.eac.dk
