By Cristina Roca and Sarah Sloat
Sika AG shares traded sharply higher early Thursday after the Swiss specialty-chemicals company said it would acquire MBCC Group from an affiliate of Lone Star Funds for an enterprise value of 5.5 billion Swiss francs ($5.99 billion).
MBCC, formerly BASF Construction Chemicals, is based in Germany. The deal will be highly complementary across most of Sika's core technologies, applications, and solutions, Sika said.
At GMT 0851, Sika shares were up 9.6% at CHF353.50.
Sika has a strong track record on integration and could see its global market share increase to close to 20% on the back of the deal if it can successfully tackle MBCC's weak spots, analysts at Baader Helvea said in a note.
The purchase price is significantly higher than the CHF3.5 billion which U.S. private-equity firm Lone Star paid for the business in 2019, but the deal still looks inexpensive when taking into account the synergies it should create, Jefferies analysts said.
The Swiss company expects annual synergies between CHF160 million and CHF180 million by 2025 from the deal. It will be accretive to Sika's earnings per share from the first full year post closing, slated for the second half of 2022, Sika said.
MBCC has approximately 7,500 employees and operations in more than 60 countries. In 2021, the company is expected to generate net sales of CHF2.9 billion, according to Sika.
Write to Cristina Roca at cristina.roca@wsj.com and Sarah Sloat at sarah.sloat@wsj.com