Acquisitions of Endeka Group and Gardenia Quimica will broaden Ferro’s portfolio of products
Ferro Corporation, a global provider of functional coatings and color solutions, announced that it has entered into a definitive agreement to acquire Endeka Group, a global producer of high-value coatings and key raw materials for the ceramic tile market. In a separate transaction, Ferro has also acquired a majority interest in Gardenia Quimica, which supplies the ceramic tile market. Both privately held companies are headquartered near Ferro’s facilities in Castellón, Spain, a major hub of the worldwide ceramics market.
Ferro’s acquisition of Endeka for approximately 64 million EUR (approximately 75 million USD) is subject to customary closing conditions and is expected to be completed in the fourth quarter. The transaction will be funded through excess cash and borrowings under the company’s existing revolving credit facility.
Endeka full-year forecasted 2018 revenues are approximately 75 million EUR (approximately 88 million USD). Ferro expects the transaction to be accretive to earnings and 2018 post-synergy adjusted EBITDA, which is forecasted to be approximately 11-12 million EUR (approximately 13-14 million USD). Endeka produces frits and glazes, digital inks and colors used in the manufacture of a broad range of ceramic products, including tile, tableware and sanitaryware. This transaction backward integrates Ferro into certain key raw materials used in the manufacture of ceramic coating materials. Endeka has approximately 340 employees who work in 9 facilities in Europe and Asia.
The Gardenia Quimica transaction was completed on August 3, 2017. Gardenia Quimica has 26 employees and produces mediums, additives, binders, and other ancillary products for the tile coatings industry. Gardenia’s products enable Ferro to further backward integrate into a number of materials used by Ferro and its customers in the manufacture of tile coating products. The transaction resulted in Ferro increasing its ownership in the joint venture company from a minority to a majority position. Revenue is forecasted to be approximately 5 million EUR (approximately 6 million USD) in 2018.
Peter Thomas, Chairman, President and CEO of Ferro Corporation, said, “These transactions will strengthen our Performance Coatings business by providing multiple opportunities for us to optimize manufacturing operations and cash conversion and to further innovate within our ceramic coating products portfolio.
“Over the past few years, we have moved our tile-oriented portfolio up the value chain, focusing on the high end of the market. At the same time, we have driven operating efficiencies and product innovation to ensure that our customers receive the highest quality products and services.
“Endeka Group and Gardenia Quimica complement our previously announced acquisition of SPC, a high-end tile coatings manufacturer based in Italy. These businesses allow Ferro to deliver more innovative products to the highest end of the global tile market. Endeka is a business that has impressed us for quite some time. Its primary production site in Castellon will provide Ferro with necessary production capacity in Spain, enabling us to avoid capital expenditures to expand our existing facilities there. The opportunity to backward integrate into key raw materials and other complementary products allows us to broaden our product portfolio for customers, and to add manufacturing productivity.
“We are excited to work with the Endeka and Gardenia teams. We look forward to working with them to accelerate efficiency and innovation throughout our operations and to build on our market leadership positions.”