Degussa Divests Dental Operations
New milestone in sole focus on specialty chemicals
As part of its swift focus on specialty chemicals, Degussa AG of Dusseldorf has divested its Dental unit, based in Hanau-Wolfgang, Germany, in an agreement providing for the combination of Degussa Dental and Dentsply International Inc., of York, Pennsylvania, in a cash transaction valued at € 576 million. This sum includes assumption of the Degussa Dental Group’s net financial debt, which amounts to approx. € 30 million. The agreement is still contingent on the approval of the antitrust authorities and the Supervisory Board of Degussa.
Taking the Dental Group's book value of approx. € 250 million as its basis, Degussa expects that an extraordinary profit of more than € 290 million will arise from the transaction. Moreover, the sale will benefit Degussa's future earnings insofar that approx. € 10 million will no longer be required a year for goodwill amortization.
Prof. Dr. Utz-Hellmuth Felcht, Management Board Chairman of Degussa: "After selling Phenolchemie and dmc², the Dental deal is the latest divestment project that we have brought to a successful conclusion. Within a mere four months we have sold the equivalent of 68 percent of € 6.47 billion, the total turnover of the operations from which we are parting company in the context of our focussing strategy."
In 2000, Degussa put its global dental activities into separate legal entities effective July 1 of the same year. The Degussa Dental Group is the second largest dental company worldwide, and the market leader in Germany and Europe. In fiscal 2000, the corporation, which has an international payroll of about 1,450 people, generated sales of € 472 million, whereby pro-forma earnings before interest and taxes (EBIT) reached approx. € 27 million.
Dentsply International Inc., which is the largest dental corporation in the world, achieved sales of US$890 million and an EBIT of US$164 million in fiscal 2000 with a global workforce of 6,000.
Strengthening the Hanau-Wolfgang location
Outstanding prospects for the future beckon Degussa Dental in combination with the Dentsply Group. Dentsply and Degussa Dental complement each other ideally in terms of product lines, corporate and marketing strategy and in a regional sense. It is in this latter respect that Dentsply will be making Degussa Dental the flagship of its European dental laboratory activities, which will be run as a whole from Hanau-Wolfgang.
In combination with Dentsply, Degussa Dental will continue to pursue its existing growth strategy, thus creating potential for additional jobs.
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