Belgium's Solvay to buy US producer Chemlogics for US$1.3b

[LONDON] Solvay has agreed to buy US producer Chemlogics for US$1.3 billion in cash to expand its offering of chemicals for the oil and gas industry.

The Belgian company is paying 10.7 times earnings before interest, taxes, depreciation and amortisation for the business, which generated about US$500 million in annual sales, Solvay said yesterday in a statement. The Brussels-based chemical manufacturer will sell about one billion euros (S$1.69 billion) in hybrid bonds to help support finances.

The purchase is part of chief executive officer Jean-Pierre Clamadieu's transformation of Solvay as he expands its offering of more profitable materials. Profit from Chemlogics's products, used to ease friction in drilling, is growing at more than 10 per cent, said Solvay, which already makes some ingredients used in this area. That contrasts with a slowdown in sales at polyvinyl chloride operations that Mr Clamadieu is seeking to exit via a joint venture with Ineos Group Holdings.