Evonik Industries AG, Germany, is acquiring the silica business of Edison, N.J., USA-based J.M. Huber for $630 million. This enables Evonik to expand its position in North America and Asia in this business sector. 

"Huber Silica will significantly strengthen our growth segment resource efficiency," said Klaus Engel, chairman of the Evonik Executive Board of. "In addition, it offers the opportunity to strategically develop Evonik’s portfolio." 

"The silica business has been part of Huber since the 1950s and paved the way for our company’s global expansion into engineered materials," said Mike Marberry, president and CEO of Huber. "While it is difficult to part with a longstanding business, we see Evonik as an excellent strategic fit for both our silica customers and employees." 

The silica market is characterized by its variety of applications and shows above-average annual growth of 4% to 6%. Huber’s business is especially oriented towards applications in the consumer goods industry, the dental sector for example. To date, Evonik’s silica business has been focused rather on industrial applications. 

"Combining the complementary silica businesses of Evonik and Huber will strengthen an important pillar of our portfolio," explained Christian Kullmann, Evonik Executive Board Member for Strategy. "Also, Huber Silica is an excellent regional fit with its focus on the U.S., China and India." 

Silica are small particles based on silicon dioxide. Depending on the surface structure, they have a significant influence on the final product characteristics. Production is strongly technology-driven and thus ensures intensive and lasting customer relationships. The manufacturing process is independent from oil-based raw materials and therefore well-suited to Evonik’s sustainable business strategy 

For the 2016 financial year, Huber Silica is expected to achieve sales of close to $300 million  and an EBITDA of $60 million. This corresponds to an attractive EBITDA margin of more than 20%. 

Through the ideal complementarity of the two business areas, Evonik expects to generate synergies of $20 million, largely in the areas of production, logistics, and procurement as well as through harmonization of the product portfolio. Evonik expects to have all synergy measures implemented by 2021. 

The transaction is scheduled to be completed in the second half of 2017, subject to approval by the responsible authorities. 

J.M. Huber Corp. is one of the largest, family-owned businesses in the U.S. It was founded in 1883 by Joseph Maria Huber, an immigrant from Germany. Today, the company has a broad product portfolio ranging from specialty chemicals to the forestry sector. Huber employs about 4,000 people in 20 countries, including about 700 employees in the silica business at six locations.