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Sika offers to acquire mortar manufacturer Parex


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Sika offers to acquire mortar manufacturer Parex

Sika AG made a binding offer to acquire mortar solutions manufacturer ParexGroup SA from private equity firm CVC Capital Partners Ltd.'s CVC Fund V at an enterprise value of CHF2.5 billion.

The deal will be financed via a bridge loan facility committed by UBS and Citi, Sika said, adding that it intends to place a long-term funding structure comprising cash on hand, bank loans and capital market instruments.

The transaction is expected to close in the second or third quarter, subject to a French works council consultation process and regulatory approvals, and is anticipated to be accretive to Sika's EPS from the first full year post closing.

Parex, which manufactures facade mortars and tile adhesives, among others, booked CHF1.2 billion in sales for 2018 and expects EBITDA of around CHF195 million for the year. Sika said the acquisition will strengthen its position in the construction chemicals and industrial adhesives business.

Separately, Sika reported sales of approximately CHF7.09 billion in 2018, up 13.7% year over year in local currencies. For 2019, the company expects sales to exceed CHF8 billion, depending on the closing of the Parex transaction.