Elkem: Acquisition of Polysil

On 30 December 2019, Elkem ASA announced that it has entered into an agreement to acquire all of the shares in Polysil, a Chinese silicone elastomer and resin materials manufacturer with strong positions in baby care and food grade silicones, as well as silicone products for the electronics and medical markets. The companies have agreed an enterprise value for Polysil of up to CNY 941 million (~ EUR 122.6 million), including potential earn-out dependent on pre-agreed parameters. Completion of the acquisition is subject to final regulatory approvals. Closing is expected by end of Q1 2020.

Polysil is a privately owned company with more than 400 employees located in Zhongshan in Guangdong, China. The company has leading technology positions in production and development of heat cured rubber (HCR), liquid silicone rubber (LSR) and speciality resin and pressure sensitive adhesives (PSA). Polysil has two production facilities and a research and development centre with more than 50 scientists. In 2019, Polysil is estimated to generate a total operating revenue of CNY 612 million (~ EUR 79.7 million) with an EBITDA of CNY 110 million (~ EUR 14.3 million). Approximately 90 % of Polysil’s revenues are generated in China, primarily in South China.

“We are continuing to deliver on our growth and specialisation strategy. Acquiring Polysil will strengthen our position in selected specialised silicones segments in China. There are considerable synergies in leveraging Elkem’s upstream capabilities to supply raw materials and intermediates, and in combining both the product portfolio and the domestic and global market positions of Polysil and Elkem,” said Michael Koenig, CEO of Elkem.

“Polysil is very pleased to become part of the Elkem group and looks forward to working closely with Elkem in achieving common goals. Elkem’s products, knowledge and brand complement the Polysil product range and will benefit Polysil customers going forward,” said Hanxi Ma, the largest shareholder of Polysil.

“Polysil’s products and market positions in food, baby care, electronics and medical markets are complementary to Elkem. Polysil has particularly strong positions in the fast-growing South China market where approximately half of all Chinese silicone rubber consumption is. There is significant potential in utilising Polysil’s high-end liquid silicones rubber and pressure sensitive adhesives specialty positions and in further developing both products and markets. Polysil’s strong research and development capabilities will be very important for development of products for both the Chinese market and globally,” said Frederic Jacquin, Senior Vice President Elkem Silicones.

Founded in 1904, Elkem is a supplier of silicon-based materials with operations throughout the value chain from quartz to speciality silicones, as well as attractive market positions in speciality ferrosilicon alloys and carbon materials. The company is headquartered in Oslo, Norway. It has 6,200 employees with 27 production sites and sales offices in a total of 28 countries worldwide. In 2018 Elkem had revenues of NOK 25.9 billion (~ EUR 2.6 billion).

www.elkem.com
www.polysil-silicone.com