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Manufacturing and marketing raw materials for the plastics industry controlled by the Pimi Foundation, reports today that it has signed an agreement to acquire the activities of the German MCT, which manufactures and markets products and additives from polypropylene and thermoplastic elastomers, for about 25 million euros.
MCT is mainly engaged in the automotive industry and most of its revenue is from the German market. According to Polyram, in 2021 its revenue turnover was about 27.9 million euros. Upon completion of the transaction, Polyram will continue to operate MCT’s production lines and market its products to its customers, using MCT’s distribution network to sell Polyram products in Germany and other European countries.
The consideration for the purchase also includes an Earn Out mechanism, according to which the sellers will be able to receive an additional consideration of up to 5 million euros, subject to the MCT business results in 2022 and 2023. Polyram will finance the acquisition from its own sources, after completing a share issue of NIS 97 million last month.
Yuval Peleg, CEO of Polyram: “The acquisition of MCT’s operations is part of the implementation of the company’s business strategy, to grow both organically and through acquisitions that are synergistic with existing operations. MCT is an established corporation operating in Germany and other European countries, and has long-term agreements with companies in the automotive and other industries. The deal for Polyram will for the first time be a local manufacturing activity in continental Europe, which is integrated into its global manufacturing operations, two plants in Israel, a plant in the United States, a recycling plant in England and a plant in China. “The acquisition of MCT will allow us to cross-sell, in which we will be able to sell Polyram products through MCT’s distribution network to its customers in Europe, while we add the MCT product basket to the company’s existing portfolio that we offer to our customers.”
Already in the third quarter reports, Polyram reported that it is in negotiations and the acquisition of the company for 25 million euros, the reported amount. It also announced that it grew by 33% in the quarter. Operating profit increased by 51% to NIS 36 million, after revenue growth in all areas of activity and sectors. Gross profitability improved by 36% to a margin of 22.4% – which rolled into the profit line. The improvement was due to increased spacing.
Along with the acquisition of MCT operations, Polyram is preparing to increase production capacity in accordance with the levels of demand for its products. The company is currently starting the operation of the first dedicated recycling line in Israel, in parallel with the installation of a production line for engineering thermoplastic compounds (EP) products on the company’s website in England.
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