Elementis to acquire SummitReheis

Elementis has agreed to acquire SRLH Holdings (SummitReheis) from an affiliate of One Rock Capital Partners for an enterprise value of US$360m.

SummitReheis will become part of an enlarged personal care business within Elementis.

For the year ended 31 December, SummitReheis is expected to report revenue of US$134m and underlying EBITDA of approximately US$28m.

The acquisition enterprise value is equivalent to approximately 11.8x expected underlying EBITDA for 2016 (including run rate cost synergies).

Elementis also announced that it would report its results for the year ended 31 December on 1 March.

Elementis said it expected earnings per share for the year to be in line with current market forecasts and that the board was considering special dividends for 2016 which would not be impacted by the acquisition.

Chief executive Paul Waterman said: "At our recent capital markets day presentation, we highlighted the growth prospects in personal care as a key opportunity for Elementis, driven by long term positive demographic trends and an increasingly sophisticated consumer.

"Our leading position with proprietary hectorite and Rheoluxe rheology modifiers will be augmented by SummitReheis's complementary position in specialty additives for anti-perspirants, pharmaceuticals and dental products.

"The Group is well positioned to capitalise on this acquisition through the enhanced geographic footprint and strong customer relationships that it brings.

"Together with our existing business, the acquisition of SummitReheis is transformative for our personal care business, creating a substantial, high return platform that will help accelerate our Reignite Growth strategy."

At 8:03am: (LON:ELM) Elementis PLC share price was +17.75p at 292.95p