FRANKFURT: German chemical company Lanxess is buying US-based Emerald Kalama Chemical for an enterprise value of about $1.08 billion to strengthen its consumer business.

The acquisition was announced on Sunday by Lanxess which said it would be financed by its existing liquidity. The deal is expected to close in the second half of this year subject to approval by the relevant authorities, the German firm added.

Emerald is a specialty chemicals company whose products include food preservatives, household and cosmetic applications, flavours and fragrances, as well as plastics and adhesives for industry. Lanxess is buying it from affiliates of private equity firm American Securities LLC.

"By acquiring Emerald Kalama Chemical, Lanxess strengthens its specialty chemical portfolio, especially in the consumer protection segment, and would materially expand into the growth markets of food and animal nutrition," it said.

Emerald Kalama employs around 500 employees and runs three production sites in Kalama in the U.S. state of Washington, Rotterdam in the Netherlands, and Widnes in Britain.

The company reported 2020 sales of around $425 million and earnings before interest taxes depreciation and amortisation (EBITDA) before exceptionals of around $90 million.

Around 45% of its turnover is generated in North America.

Lanxess said the acquisition would be earnings-per-share accretive in the first fiscal year after its completion. Within three years following completion it expects synergies, or cost savings, to generate an additional $30 million in annual EBITDA.