Air Products sells PMD to Evonik

US INDUSTRIAL GASES company Air Products and Chemicals will sell its performance materials division (PMD) to German speciality chemicals maker Evonik Industries for US$3.8bn in cash.

PMD products include epoxy curing agents, which make up 40% of its sales, polyurethane additives (32%), and specialty additives (28%).

Air Products said the sale is part of its long-term restructure plan and it intends to spin off its electronic materials division into a separate company called Versum Materials. The new company will offer materials for semiconductor fabrication such as chemical mechanical polishing slurries, deposition precursors, and etching chemicals.

The electronic materials division generated US$974m in revenues in the 12 months previous to 31 March. Air Products said the spinoff of Versum to shareholders should be complete by September.

Seifi Ghasemi, chairman, president and CEO of Air Products, said: “I am very pleased that PMD has a great future ahead of it as a core business of a company which is even larger than Air Products.”

Evonik will also take control of PMD’s 11 production and development sites in Pennsylvania, US and will also acquire its 1,100 employees.

Evonik said the purchase of PMD and its specialised polyurethane foam catalysts would complement Evonik’s polyurethane foam stabilisers business. PMD’s polyurethane foam additives and the coating and adhesives businesses were also complementary to Evonik’s plan to expand its US operations. The purchase will be the largest in the company’s history.

Klaus Engel, CEO of Evonik, said: “Air Products’ Specialty & Coating Additives business perfectly complements this fast-growing segment. With this acquisition we are expanding our portfolio with precisely the right markets, products and innovations and continuing to invest in our growth and profitability.”

Evonik expects the transaction to eventually generate cost and marketing revenues of US$80m /y in synergies from PMD. The division has already generated a total revenue of US$1.04bn over the 12 months previous to 31 March.

Both companies say the purchase of PMD should be complete before the end of 2016.