COVESTRO AG (FRA:DE000606) Covestro AG: Covestro to acquire the Resins & Functional Materials business (RFM) from DSM

Transparency directive : regulatory news

30/09/2020 08:01

DGAP-Ad-hoc: Covestro AG / Key word(s): Mergers & Acquisitions
Covestro AG: Covestro to acquire the Resins & Functional Materials business (RFM) from DSM

30-Sep-2020 / 08:01 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

September 30, 2020 - Covestro today has signed an agreement to acquire the Resins & Functional Materials business (RFM) from Royal DSM. Through this transaction, Covestro is taking a significant step in its long-term corporate strategy to strengthen its sustainable and innovation-driven businesses. The integration of RFM will add about EUR 1 billion in revenues and an EBITDA of EUR 141 million (2019) and is a substantial strategic growth opportunity to expand revenues of the Coatings, Adhesives, Specialties (CAS) segment of Covestro by more than 40% to about EUR 3.4 billion (2019 pro-forma). Covestro expects permanent ("run-rate") synergy effects to build-up to about EUR 120 million per annum from full integration by 2025.

Considering cash equivalents at RFM, the total purchase price of EUR 1.61 billion corresponds to a net enterprise value of approximately EUR 1.55 billion, representing a valuation of RFM at about 5.7x EV/EBITDA 2021 including pro-forma run-rate synergies. Excluding run-rate synergies the EV/EBITDA multiple would be 10.3x.

Financing is secured through a financing agreement which Covestro intends to refinance with a combination of equity, debt instruments and own cash generation, consistent with the company's commitment to maintaining a solid investment grade rating. For this purpose, Covestro is planning to utilize its currently existing authorized share capital for an equity issuance in order to raise approximately EUR 450 million.

Closing of the transaction is expected for the first quarter of 2021 and is subject to regulatory approvals, including antitrust clearance.

Contact for investors:
Ronald Köhler, Head of Investor Relations
Phone: +49 214 6009 5098
E-mail: ronald.koehler@covestro.com

Contact for media:
Lars Boelke, Global Corporate Media Relations
Phone: +49 214 6009 4206
E-mail: lars.boelke@covestro.com

30-Sep-2020 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de

Language:	English
Company:	Covestro AG
	Kaiser-Wilhelm-Allee 60
	51373 Leverkusen
	Germany
Phone:	+49 (0) 214 60095098
Fax:	+49 (0) 214 60097002
E-mail:	ronald.koehler@covestro.com
Internet:	www.covestro.com
ISIN:	DE0006062144
WKN:	606214
Indices:	DAX
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID:	1137769


End of Announcement	DGAP News Service

1137769 30-Sep-2020 CET/CEST

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COVESTRO AG (FRA:DE000606) Covestro AG: Covestro to acquire the Resins & Functional Materials business (RFM) from DSM

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