Two Acquisitions for Ferro Expand Ceramic Coatings Business
The company has entered into a definitive agreement to acquire Endeka Group and in a separate transaction, it has acquired a majority interest in Gardenia Quimica.
Ferro Corp. recently announced that it is expanding its ceramic coatings business through two international acquisitions. The company has entered into a definitive agreement to acquire Endeka Group, a global producer of high-value coatings and key raw materials for the ceramic tile market. In a separate transaction, Ferro has acquired a majority interest in Gardenia Quimica, which also supplies the ceramic tile market. Both privately held companies are headquartered near Ferro’s facilities in Castellón, Spain.
Ferro’s acquisition of Endeka for approximately €64 million (approximately $75 million) is subject to customary closing conditions and is expected to be completed in the fourth quarter. The transaction will be funded through excess cash and borrowings under the company’s existing revolving credit facility.
Endeka full-year forecasted 2018 revenues are approximately €75 million (approximately $88 million). Ferro expects the transaction to be accretive to earnings and 2018 post-synergy adjusted EBITDA, which is forecasted to be approximately €11-12 million (approximately $13-14 million). Endeka produces frits and glazes, digital inks, and colors used in the manufacture of a broad range of ceramic products, including tile, tableware and sanitaryware. This transaction backward integrates Ferro into certain key raw materials used in the manufacture of ceramic coating materials. Endeka has approximately 340 employees who work in nine facilities in Europe and Asia.
The Gardenia Quimica transaction was completed on August 3, 2017. Gardenia Quimica has 26 employees and produces mediums, additives, binders, and other ancillary products for the tile coatings industry. Gardenia’s products enable Ferro to further backward integrate into a number of materials used by Ferro and its customers in the manufacture of tile coating products. The transaction resulted in Ferro increasing its ownership in the joint venture company from a minority to a majority position. Revenue is forecasted to be approximately €5 million (approximately $6 million) in 2018.
“These transactions will strengthen our Performance Coatings business by providing multiple opportunities for us to optimize manufacturing operations and cash conversion and to further innovate within our ceramic coating products portfolio,” said Peter Thomas, chairman, president and CEO. “Over the past few years, we have moved our tile-oriented portfolio up the value chain, focusing on the high end of the market. At the same time, we have driven operating efficiencies and product innovation to ensure that our customers receive the highest quality products and services.”