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Quaker Houghton Buys UK’s Norman Hay

05.09.2019 -

Quaker Houghton, a company newly formed in the merger of US-based Quaker Chemical and the UK’s Houghton International, has agreed to buy the operating divisions of specialty chemicals group Norman Hay for £80 million, subject to post-closing adjustments.

Headquartered in Coventry, UK, Norman Hay has approximately 400 employees and production and R&D facilities across Europe and the US. It operates four divisions serving several industries, including aerospace, automotive, oil & gas and power generation.  The divisions comprise Ultraseal, SIFCO ASC, Surface Technology and Norman Hay Engineering, which together are expected to have revenues in 2019 of around £63.5 million.

Ultraseal, accounting for around 52% of revenue, provides impregnation technology such as porosity sealants, and associated chemistry and equipment for die cast components. SIFCO ASC, with about 27% of revenues, supplies surface treatment solutions through selective electroplating, anodizing, chemical and engineering solutions.

With about 11% of group revenue, Surface Technology provides coatings, thermal sprays and plating, while Norman Hay Engineering, accounting for 10% of sales, offers design and engineering services in support of surface treatment plants for the three aforementioned divisions as well as additional third-party industrial applications.

“This acquisition represents an opportunity to add new technologies with good growth characteristics in attractive core market segments with high barriers to entry such as die casting, automotive OEM and aerospace,” said Michael Barry, Quaker Houghton’s chairman, CEO and president. “We also believe it provides a strategic opportunity to take advantage of external market trends such as the lightweighting of vehicles and 3D printing where we have the opportunity to leverage our global footprint and complementary geographic strengths.”

Quaker Houghton is required to file for German regulatory approval and anticipates receiving clearance and completing the transaction next month.

The intended acquisition comes less than a month after Quaker merged with Houghton, creating a global leader in industrial process fluids to the primary metals and metalworking markets.

With combined sales of $1.6 billion, the move has nearly doubled the size of each company. Quaker Houghton is anticipating run-rate cost synergies of $65 million by the end of year three. These will come from asset optimization, logistics and procurement, and operational efficiencies.

Barry said that Quaker Houghton’s estimated revenue of $1.6 billion represents less than 20% of an addressable market of more than $10 billion. “The near doubling of the size of the company gives us greater scale to invest in new technologies and make future acquisitions”, he stated.

Until the integration between Quaker and Houghton is finalized, Norman Hay’s divisions will operate as a standalone business within the merged entity’s Global Specialty Businesses platform.

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