Elementis (AIM: ELM), the specialty chemicals group, rose 3% after announcing the acquisition of Deuchem Co., a Taiwan based company, for £40.4 million in cash.
Deuchem supplies additives and resins to the coating industry in Asia. Deuchem's results for the year to December 31 2007 showed a profit after tax of £3.6 million on revenues of £37.9 million. Elementis said it believed the deal would be earning enhancing in the first full year of ownership.
David Dutro, CEO of Elementis, said:
"This acquisition represents a significant step in the evolution of Elementis and our commitment to profitable growth in Specialties. Deuchem has established an impressive reputation over the past thirty years for technical service and product development, and is therefore an excellent fit with our Specialty Products Division. Listening to customers' needs and working to meet them is a philosophy that Deuchem and Elementis share. Deuchem has a strong presence in Asia in terms of its commercial team, technical organization, and manufacturing group, and when combined with the Elementis infrastructure provides an enviable platform to drive growth. Deuchem's complementary product portfolio, customer service culture, and the opportunity to leverage combined technologies globally gives us confidence that this acquisition will create shareholder value."