Clariant, a company known for its commitment to sustainability and specialization in specialty chemicals, has announced a significant development in its growth strategy. The company has entered into an agreement to acquire Lucas Meyer Cosmetics, a prominent provider of high-value ingredients tailored for the cosmetics and personal care industry. This strategic move involves the purchase of Lucas Meyer Cosmetics from International Flavors & Fragrances (IFF), with a total cash consideration of USD 810 million (approximately CHF 720 million) on a debt-free, cash-free basis. The valuation of this acquisition, when viewed as an EV/EBITDA multiple for the last twelve months ending in August 2023, stands at 16.3x. The completion of this transaction is contingent upon regulatory approvals and customary closing conditions and is anticipated to be finalized in the first quarter of 2024.

Conrad Keijzer, the Chief Executive Officer of Clariant, commented on this acquisition, emphasizing its alignment with Clariant's purpose-driven growth strategy. This acquisition is expected to bolster Clariant's position as a specialty chemical company, enhance its exposure to consumer markets, expand its presence in North America, and contribute to its mission of accelerating innovation driven by both customers and sustainability. Furthermore, this move will bring Lucas Meyer Cosmetics' experienced leadership team into the Clariant fold, further strengthening the company's capabilities. Clariant has a track record of successful integration of bolt-on acquisitions, and it aims to create value and achieve profitable growth through this strategic addition to its portfolio.

Lucas Meyer Cosmetics, founded in 1999 and headquartered in Québec, Canada, has emerged as a key player in the high-value active and functional cosmetic ingredients market. The company's competitive edge lies in its exceptional marketing and innovation capabilities, underpinned by global research and development centers and regional application facilities. Additionally, the company's customer-centric approach has led to strong brand recognition among customers worldwide.

This acquisition is strategically compelling due to the complementarity of Clariant and Lucas Meyer Cosmetics in terms of customer portfolios, product offerings, regional strengths, and capabilities in research and development and marketing. The combined entity is uniquely positioned to provide solutions to high-value personal care brands. The transaction is pivotal in transforming Clariant's portfolio towards high-growth, high-margin, and highly cash-generative specialty chemical businesses, aligning with the growing demand for natural and sustainable products. It will also reinforce Clariant's presence in North America within the Care Chemicals business unit.

The acquisition is scheduled to conclude in the first quarter of 2024. Alongside this announcement, Clariant has also released its third quarter and nine-month figures for 2023. The company has planned a conference call for analysts and investors to discuss both the proposed acquisition of Lucas Meyer Cosmetics and the third quarter and nine-month financial results. This conference call aims to provide further insights into these developments and their implications for Clariant's future growth and strategic positioning in the specialty chemicals industry.