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Imerys: Acquisition of Kerneos

With this operation, the Group would again enhance its specialty offering in high-potential markets and improve its growth and profitability profile while creating value. Thanks to its expertise in calcium aluminate technologies, Kerneos develops performance binders that contribute key properties (rapid hardening, self-leveling, sealing and wear, corrosion or heat resistance), to its customers’ innovating solutions for construction (screed and adhesive tiles mortars, etc.), civil engineering (sewage system infrastructure, etc.) or refractories (protection of blast furnaces, thermal power plant, etc.) sectors. With an access to quality mining reserves and resources, a global sales network, 9 high-performance production sites in 5 countries and great innovation capability, Kerneos fits perfectly with Imerys’ business model and has a sound history of growth and profitability. Over the past three years, Kerneos has achieved annual average sales growth of + 3,3 %, of which + 7,1 % organic growth in construction technologies. With operations in Europe, North America and emerging countries, and 1500 employees, Kerneos posted consolidated revenue of EUR 415 million over the last 12 months as of 30 September 2016. Over the same period, EBITDA grew + 8 % to almost EUR 100 million, while current operating cash flow totaled EUR 74 million before tax, i.e. 18 % of revenue. Finally, the acquisition project of Kerneos, for an estimated total enterprise value of ca. EUR 880 million, would be in full compliance with Imerys’ external growth criteria. It would have a positive impact on net income from current operations per share from the first year of consolidation and would rapidly create value thanks notably to synergies estimated at EUR 23 million. The transaction, entirely funded by the Group’s available resources, would maintain Imerys’ financial soundness and complies with its goal of keeping an investment grade credit rating. It remains subject to relevant workers’ council consultation, as well as regulatory authorities’ approval and should be completed mid-2017.

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