Evonik Buys Air Products’ PMD Segment

Air Products signed a definitive agreement to sell the Performance Materials Division (PMD) of its Materials Technologies segment to Evonik Industries for $3.8 billion in cash. PMD’s sales topped $1 billion for the year ended March 31, 2016. PMD’s business includes specialty additives businesses, which accounted for approximately 28% of revenues.

PMD has approximately 1,100 employees and includes major production facilities in the US, Germany, the United Kingdom, China and Japan. Its products provide distinct, performance-enhancing benefits in use across the construction, marine, automotive, industrial cleaning and other markets.

Air Products’ Specialty & Coating Additives business can be rapidly integrated into the growth segments of Nutrition & Care and Resource Efficiency, said Evonik.

According to Evonik, with its product lineup and strong positions in the key global markets, the firm and its newly-acquired business are highly complementary. The specialty and coating additives add critical and highly valuable characteristics to Evonik’s customers’ products. The two businesses serve three particularly attractive, rapidly growing core markets: coating and adhesive additives, high-value PU foam additives, and specialty surfactants for industrial and institutional cleaning. They target the same end customers, but with different and complementary products, said Evonik.

Furthermore, Evonik said it and the acquired division also complement each other on a geographical basis. While the focus of the Air Products’ business is on North America and Asia, Evonik is particularly strong in Europe. With the current acquisition, Evonik is crucially boosting its standing in the North American market, allowing it to serve the increasingly global activities of its customers even more effectively. At the same time, by growing in North America and Asia, Evonik is reducing its dependence on the European market and therefore better protecting its own business against economic fluctuations in individual regions. Evonik intends to continue to run PMD from Allentown, PA.

The sale of PMD is expected to close before the end of the year. Air Products intends to spin-off its Electronic Materials Division (EMD).