Engineering News

ICL to Acquire Supresta, the World's Largest Producer of Phosphorus Flame Retardants
Monday June 25, 2:29 am ET

Acquisition of Supresta (2006 Sales: $250M) to Significantly Enhance ICL Industrial Products' Range of Flame Retardants and Expand its Portfolio of Value-Added Products

TEL-AVIV, Israel, June 25 /PRNewswire-FirstCall/ -- Israel Chemicals Ltd. ("ICL") (TASE:ICL), a multinational fertilizer and specialty chemicals company, today announced that it has entered into a definitive agreement to acquire U.S.-based Supresta LLC ("Supresta"), the world's largest producer of phosphorus-based flame retardants and other products made from phosphorus. The purchase price is $352 million, subject to certain adjustments, mainly working capital. The consideration will be paid in cash upon closing of the transaction. ICL is financing the purchase from its own resources and from existing bank credit lines. After the acquisition, Supresta will become part of the ICL Industrial Products segment, giving the segment annual revenues of approximately $1.1 billion (based on 2006 data).

Supresta is the world's leading manufacturer and marketer of phosphorus-based flame retardants. Originally the phosphorus chemicals unit of Akzo Nobel, the Dutch chemical company, Supresta was established in 2004 with the acquisition of its operations from Akzo Nobel by a portfolio company of Ripplewood Holdings LLC, a U.S.-based private equity firm. Today, Supresta employs more than 300 people in two plants, one in the U.S. and one in Germany. It manufactures more than 80 phosphorus-based products used in industrial applications, ranging from flame retardants for polyurethane foam and engineering resins to plasticizers for the plastics industry, functional fluids for power stations and other uses. Supresta operates two R&D and applications centers and markets its products throughout the world, with particular strength in North America and Europe.

ICL intends to integrate Supresta into ICL Industrial Products to realize operating synergies, including synergies in the purchase of raw materials. The acquisition will diversify ICL Industrial Products' portfolio of flame retardants, enabling it to initiate sales to the polyurethane foam and engineering plastics markets, while also enhancing its geographic marketing reach. In addition, the acquisition will enhance ICL Industrial Products' R&D capabilities through the addition of organophosphorus technology and intellectual property towards the development of next-generation products based on phosphorus.

"We are excited by the growth prospects of the Supresta business itself and by the significant synergistic benefits that it offers ICL Industrial Products," said Mr. Yossi Shahar, President and CEO of ICL Industrial Products. "By joining forces, we will be creating an entity with a leading position in the global flame retardant fields, strength in high-potential new markets and an expanded sales reach into strategic geographic regions. Supresta's excellent products for the construction, furniture and other applications, together with its complementary technologies, will enable us to create a new area of growth beyond our traditional markets. Overall, we will be better positioned as a more efficient and diversified company with a wider range of products and technologies for our customers."

Following is a summarized presentation of Supresta's financial results:
US $ Million
Gross profit
Adjusted operating profit(1)
Adjusted EBITDA(1)
Total assets

1) Adjusted Operating Profit and EBITDA are non-GAAP measures provided to assist the reader in understanding Supresta's past operating performance. They are adjusted for one-off expenses such as management fees and transition expenses; and for cancellation of increased depreciation following the acquisition of Supresta by Ripplewood Holdings in 2004.

Annual data was taken from audited financial reports prepared in accordance with U.S. GAAP. The results for January-May were taken from Supresta's monthly management reports which were neither reviewed nor audited, and are not necessarily prepared in accordance with GAAP.

The completion of the transaction is subject to a number of conditions including the approval of the antitrust authorities. It is anticipated that the closing of the transaction will occur late in the summer.

Rothschild Inc. served as financial advisor to ICL while Dechert LLP and Efrati Galili Lahat & Co. provided legal counsel.

About ICL Industrial Products

ICL Industrial Products produces about a third of the world's elemental bromine and is a leading provider of bromine-based downstream products such as flame retardants, clear brines for the oil and gas exploration industries and water treatment biocides. It also produces magnesia and chlorine-based salts. ICL Industrial Products' primary markets include Western Europe, the US, China, Japan and Taiwan. Its revenues for 2006 were $838 million with operating income of $208.9 million.

About ICL

ICL is one of the world's leading fertilizer and specialty chemicals companies. ICL produces approximately a third of the world's bromine and approximately 10% of its potash. ICL is a leading supplier of fertilizers in Europe and a major player in specialty fertilizer market segments. One of the world's most integrated manufacturers and suppliers of phosphate products, ICL has become the world's leading provider of pure phosphoric acid and a major specialty phosphate player. The Company employs approximately 9,300 employees worldwide.

ICL is comprised of three core segments: ICL Fertilizers, ICL Industrial Products and ICL Performance Products. Its major production activities are located in Israel, Europe, the US, South America and China, and are supported by major global marketing and logistics networks. ICL benefits from exclusive concessions to extract minerals from Israel's Dead Sea, a vast source of high-quality and low-cost potash, bromine, magnesium chloride and sodium chloride. ICL also mines phosphate rock from Israel's Negev Desert and potash and salt from its mines in Spain and the UK.

ICL's (Israel Chemicals Ltd.) revenues for 2006 were $3.3 billion with operating income of $536 million. ICL's shares are traded on the Tel Aviv Stock Exchange.

Source: Israel Chemicals Ltd.

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