Deal Announcement 04/18: Chemicals

The Deal

With the official signing of the contract on 27 April 2018, Follmann has acquired the adhesive manufacturer Sealock Ltd. based in Andover. Sealock Ltd. develops, produces and sells hot-melts and water-based adhesives for the packaging industry, including for example PSA hot-melts, which optimally complement Follmann’s portfolio. „The transaction matches perfectly with our growth strategy in adhesives” says Dr. Henrik Follmann, shareholder of the Follmann Chemie Group. „In selling these products through the Follmann organisation, we will be able to develop significant growth opportunities, especially for the German market, where Sealock Ltd. is not running any business activities yet. For this reason, the outlined strategy will strengthen the position of both Sealock Ltd. and Follmann.”

PwC M&A carried out a broader analysis of the market for adhesives players in Europe on behalf of Follmann. Sealock appeared early on as a highly attractive partner in this review and PwC was able to initiate conversations with the shareholders. The subsequent M&A process was based on one to one discussions and early-on agreement on key commercial terms of the transaction. The corresponding SPA was signed in April 2018 and the transaction consummated immediately thereafter. Financial terms of the transaction were not disclosed.

Follmann Chemie GmbH

Follmann Chemie GmbH is an independent family-owned chemicals specialist originally founded by Heinrich and Dr. Rainer Follmann. The company initially specialised in chemical products for the construction industry. Just three years later, in 1980, the company extended its operations to include printing and coating materials for decorative and industrial end- products.

In the years that followed, Follmann increased its international market operations and achieved considerable growth in all business areas. From 2002, it positioned itself as an adhesives manufacturer under the umbrella of Follmann GmbH & Co. KG. In combination with extended international presence, Follmann today has a diversified geographical setup with own subsidiaries in among others Russia and China.

Today, the company is managed by the third generation in the family, Dr. Henrik Follmann, has more than 700 employees who together achieved annual revenues of over € 200 million.

Sealock Ltd

Sealock was originally founded in 1983 by John Young. As of today, his son, Chris Young, has taken over responsibility as Managing Director of the family-owned business. Sealock Ltd. currently employs 20 people and achieves an annual turnover of about 6 Mio. Euro. The company runs a 100 % subsidiary in Poland and holds shares in adhesive companies based in France (Sealock Sarl) and Russia (Intermelt ZAO).

PwC

The global PricewaterhouseCoopers network is a worldwide association of independent auditing and consulting companies, which together employ more than 223,000 employees in 157 countries. Our global network comprises nearly 2,500 M&A professionals all over the world, realizing approx. 400 successful transactions per year. We specialize in a wide range of independent M&A services including advice on acquisitions and disposals, mergers, public takeovers, privatizations as well as structured financing.

The PwC M&A team in Germany acted as exclusive financial advisor to Follmann.

The PwC M&A deal team consisted of Martin Schwarzer (Partner), Alexander Wenzel (Director), Rolf Püschel (Senior Manager), Stefan Pruden (Consultant) and Rosmarie von Rottkay (Senior Consultant).