Lanxess Plans To Sell All Shares Of Envalior To Advent, Transaction Amount Up To $1.4 Billion

On September 24, Zhuangsu Vision learned that LANXESS has recently decided to exercise its contractual rights to sell all of its 40.94% stake in its joint venture partner Envalior to a controlling company under Advent International. Provided that financing is in place, the joint venture partner is obligated to acquire all or half of the shares held by LANXESS starting from April 1, 2026. The completion of this share sale and the proportion to be completed will be determined by March 2026 at the latest.

The contract stipulates that the base acquisition price for the proposed sale of shares is approximately 1.2 billion euros. This price is derived from the valuation result of the "High-Performance Materials Division" injected by LANXESS when the joint venture was established in the spring of 2023.

The potential purchase price adjustment depends solely on the performance of Enhuari's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA): if the EBITDA for the latest twelve months (LTM) before April 1, 2026 (i.e., current EBITDA) is higher than the EBITDA used in the valuation before the joint venture was established (i.e., historical EBITDA), the purchase price will be increased accordingly; if the current EBITDA is more than 10% lower than the historical EBITDA, the purchase price will be adjusted downward proportionally. When determining the purchase price for the shares to be sold, Enhuari's debt situation is not taken into consideration.

If Lanxess fails to complete the sale of a minority stake by 2026, an additional offer or acquisition window will subsequently arise. In 2027, Advent International has the right to acquire this portion of shares at the same acquisition price as in 2026. If Advent International does not exercise this right, Lanxess can, based on the same valuation and execution mechanism, again exercise the right to offer the sale of shares starting from April 1, 2028. However, when acquiring the 50% stake held by Lanxess in 2028, no additional financing conditions or other conditions will be attached, so Lanxess has the right to require the other party to acquire this proportion of shares under any circumstances. If any shares are sold in 2028, the base acquisition price of approximately 1.2 billion euros will still be used. If there is an adjustment to the acquisition price, it will be necessary to compare the historical EBITDA with the EBITDA for the twelve months (LTM) prior to April 1, 2028.

During the establishment of Envalior, the €200 million shareholder loan issued by LANXESS and the corresponding accrued interest will be assumed and repaid by the joint venture partner in 2028 based on the proportion of Envalior shares sold by LANXESS at that time, which means at least 50% of the loan will be repaid.