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Qemetica has signed an agreement with PPG to acquire its precipitated silica business in a deal valued at nearly 310 million USD. The Polish chemical company will acquire selected assets and PPG’s operating subsidiary, including the purchase of two plants in the US and the Netherlands, as well as rights to production and R&D operations at two additional sites in the US.

PPG’s silica business provides raw materials to some of the world’s largest companies to improve the performance of their end products. Silica is critical to the tyre industry, battery manufacturing, fillers and coatings, and has stable growth and a promising future.

This acquisition will enable Qemetica to increase its revenues and EBITDA, broaden its product portfolio and extend the Group’s geographical reach. It is one of the largest transactions of its kind by a Polish company in the US market.

The transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions, including antitrust approvals, which may take several months.

According to the Polish company, the transaction is part of a broader growth strategy. Earlier this year, when announcing its 2024-2029 plans, the company identified potential acquisitions as a key growth strategy to strengthen the group and find new growth drivers.

Kamil Majczak, CEO of Qemetica, said: “In preparing for growth through acquisitions, we defined the criteria for entering into discussions with potential sellers. We were looking for a business that we could develop and add value to, that was based in the US, that was 100% owned or controlled, and that extended our value chain. This transaction meets all of these criteria, and upon closing and full integration of the new business, we will be closer to achieving our strategic goals of developing growth sources beyond soda ash and diversifying both geographically and product-wise by increasing our presence in the global marketplace.

The transaction includes PPG’s precipitated silica production facilities in Lake Charles, Louisiana and Delfzijl, The Netherlands. In addition, Qemetica will lease a silica production line in Barberton, Ohio, and a research and development facility in Monroeville, Pennsylvania. The silica business employs approximately 400 people.

The production and sale of precipitated silica will become Qemetica’s eighth business segment and this new business will be the second largest in terms of revenue generation. Each of the Group’s eight segments operates autonomously and is responsible for its own production, sales and logistics. Qemetica’s strategy for 2024-2029 is to further increase the independence of each business unit.

The acquisition of the silica producer enriches the Group’s asset portfolio and extends its value chain, as Qemetica is one of the largest suppliers of silicates in Europe, a raw material essential for the production of silica. Silicates are in turn derived from soda ash, of which Qemetica is a leading producer on the European continent.

This transaction is also an example of vertical integration, allowing Qemetica to control different stages of the production chain. With this acquisition, Qemetica will be able to offer more advanced chemicals, such as precipitated silica, which are used by international companies in the production of end products, including modern “green” tyres.

Marcin Puziak, CFO of Qemetica, says: “The integration of the acquired business will allow us to diversify our product portfolio and expand into new geographical markets. It will also be an important step towards a more balanced distribution of revenue and profit sources across the Group. The precipitated silica business will become the second largest and the share of revenue generated in North America will exceed 10%, while the share of revenue from the Polish market will fall below 40%. This is an important step in building a global chemical group with Polish roots.