Lanxess, Advent to buy Royal DSM's engineering business in €3.7B deal

  • Lanxess (OTCPK:LNXSF) (OTC:LNXSY) and private-equity firm Advent International said they agreed to acquire DSM 's engineering materials business for ~€3.7B (nearly $4B) and create a new joint venture for high performance plastics.
  • The DSM engineering materials business, which would become part of the joint venture, represents sales of ~€1.5B and operating profit margin of ~20percent;, Lanxess said.
  • Lanxess (OTCPK:LNXSF) also will transfer its own high performance materials business into the JV and receive €1.1B as well as a stake of as much as 40percent; in the new business.
  • The German chemical company said it plans to use the proceeds from the deal to lower its debt and launch a €300M stock buyback program.

    For this year the company, located in Cologne revenue will be around 7.95 billion euros. This is according to the average of the analysts' estimates. This is slightly more than 2021's revenue of 7.56 billion euros.

    Historical revenues and results Lanxess plus estimates 2022

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    The analysts expect for 2022 a net profit of 321 million euros. For this year the consensus of Lanxess's result per share is a profit of 3.81 euros. The PE-ratio therefore is 9.95.

    For this year the analysts expect a dividend of 1.09 euros per share. The dividend yield is then 2.88 percent. The average dividend yield of the chemical companies equals an attractive 2.11 percent.

    Latest estimates around 52 euros

    The latest 3 recommendations for the chemical company were provided by Citigroup , Barclays and HSBC .

    Lanxess's market value equals around 3.27 billion . -30

    At 16.16 the stock trades 0.03 percent lower at 37.9 euros.

    Historical stock prices Lanxess2010-2022

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