As the demand for bio-based industrial solutions continues to grow, Cargill has reached an agreement to acquire Arkema’s epoxide business, which includes a facility in Blooming Prairie.
The bid for this acquisition is US$38.8 million, which is approximately 10 times historical EBITDA.
After the transaction is completed, the investment will enable Cargill to have end-to-end production capabilities for bio-based plasticizers and polyols, and enable the company to better provide industrial customers with natural alternatives to traditional petroleum-based additives.
"Industrial customers are increasingly looking for solutions that do not contain petrochemicals, especially in consumer applications where potential concerns about toxicity and sustainability continue to grow," said Curtis Miller, Managing Director of Cargill's Bioindustry Business Said in Monday's press release. "Adding this capability will allow us to innovate in the polyol value chain, transform our vegetable oils into highly functional compounds, and bring flexibility, durability and thermal stability to various industrial products."
Arkema produces bio-based and specialty epoxides, which are used as additives or intermediates in the manufacture of lubricants, plastic additives, and various other applications. As part of Arkema's hydrogen peroxide business, the business has limited integration with other product portfolios of the group, with sales of approximately US$40 million and approximately 45 employees.
These specialty oils or epoxides are key components of Cargill's existing portfolio of bio-based plasticizers and polyols. Through this acquisition, Cargill will fully control their production process, convert its commercial soybean oil into epoxides, and ultimately create bio-based plasticizers and polyols for the manufacture of various products that support the convenience of daily life, such as Such as shower curtain liners, tiles, carpets and furniture.
By combining Arkema’s manufacturing capabilities with Cargill’s bio-industry expertise, the company hopes to further support its plastics, automotive, medical, furniture, flooring and specialty chemicals customers through a broader portfolio of bio-based solutions. Polymer and lubricant modifiers, coalescing agents and other applications are used in furniture paint and foam.
Cargill hopes to provide positions for Arkema’s affected employees in Cargill’s bio-industry business, which, in addition to bio-based plasticizers and polymers, also provides construction, power generation, high-performance chemicals, and adhesives and bonding Agents develop naturally derived solutions.
The acquisition builds on Cargill’s recent other initiatives to expand its influence in the bio-industry, including the recent establishment of a partnership with the bio-butanediol facility, the acquisition of a professional beauty ingredient supplier International Floratechnologies, and its Together with the joint venture partners, PTT Global Chemical is developing a green area with integrated NatureWorks facilities in Thailand.
The transaction is expected to be completed in the fourth quarter of 2021.