Sika To Buy Former BASF Chemicals Company

Swiss chemicals company Sika has agreed to buy MBCC Group for 5.5 billion Swiss francs ($6 billion) to boost its position in sustainable building, making its biggest ever acquisition in the fragmented $70 billion construction chemicals sector.

Sika was buying MBCC, the former BASF Construction Chemicals, from an affiliate of private equity firm Lone Star Funds. MBCC's products include long-lasting flooring systems and admixtures to extend the life of concrete. Sika has identified sustainability as a major driver in the construction market, as building users seek to extend the life-span of their offices and factories and use materials with lower carbon footprints. MBCC, based in Mannheim, Germany, expects 2021 sales of 2.9 billion Swiss francs. The move for MBCC represents a step change for Sika, which has already bought seven small companies in China, Mexico, the United States, Japan, Brazil and Russia this year. The deal represents a multiple of 11.5 times MBCC's expected 2022 EBITDA, Sika said. Sika expects to achieve synergies of 160–180 million francs, bringing the multiple down to 8.5. It will finance the deal, which it expects to be "strongly accretive" to earnings per share from the first full year after closing, with a bridge loan.