The Snaith-based company said that, subject to conditions, it would take 65 per cent equity interest in Sichuan Sipo Chemical Co. is a non-listed natural speciality chemicals manufacturer based in Mianyang city, Sichuan province, China.
The majority stake will be acquired from Sichuan Forever Holding Co. and certain individual shareholders for a total consideration of £38.2m, including £8m of debt, subject to working capital, net cash and fixed asset adjustments. Sichuan Forever Holding Co. will continue as the minority shareholder retaining a 35 per cent equity interest in Sipo.
Sipo was established in 1993 and has around 300 employees. In 2012, the business reported a turnover of £28m and earnings before interest, taxes, depreciation, and amortisation (EBITDA) of £3.1m.
Steve Foots, chief executive of Croda, said: “This is a significant step forward in our strategy to increase Croda’s presence in fast growing and emerging markets.
“Sipo’s manufacturing capabilities together with our marketing expertise and sales force infrastructure are an exciting combination. We will have a stronger platform in niche markets and renewable technologies which will allow us to develop our customer base and drive sales growth in Asia. Our broader footprint in China will also enable us to be more responsive to customer needs in this important region.”