Elkem — M&A Activity 2020

Apr 14, 2020

Elkem completes Polysil acquisition

Elkem completes Polysil acquisition

Oslo, 14 April 2020: Elkem ASA has now closed the previously announced

acquisition of Polysil, a leading Chinese silicone elastomer and resins material

manufacturer.

Polysil has strong positions in baby care and food grade silicones, as well as

silicone products for the electronics and medical markets. Polysil and Elkem's

complementary product and market positions provide a solid platform for further

specialisation and growth in China and globally.

"We continue to develop Elkem's competitive positions, at the same time as we

work to safeguard our business in light of the coronavirus situation. The

financial closing of the Polysil acquisition represents an important milestone,

strengthening our position in specialised silicones segments in China, in line

with our growth and specialisation strategy. Today's macro environment

highlights the value of being a global specialty player across regions," says

Michael Koenig, CEO of Elkem ASA.

Approximately 90 per cent of Polysil's revenues are generated in China,

primarily in South China. Elkem's capabilities and positions in other parts of

China and internationally provide a solid platform for Polysil's products and

further growth. Elkem's production in China is back around normal capacity

levels, after experiencing delayed start-up after Chinese New Year due to the

coronavirus situation.

"Polysil's products and market positions in food, baby care, electronics and

medical markets are complementary to Elkem. There is significant potential in

utilising Polysil's high-end liquid silicones rubber and pressure sensitive

adhesives specialty positions and in further developing both products and

markets. Polysil's strong research and development capabilities will be very

important for development of products for both the Chinese market and globally.

This continues also in the current macro environment," says Frederic Jacquin,

Senior Vice President for Elkem's Silicones division.

Polysil has more than 350 employees located in Zhongshan in Guangdong, China.

The company has leading technology positions in production and development of

Heat Cured Rubber (HCR), Liquid Silicone Rubber (LSR) and specialty resin and

Pressure Sensitive Adhesives (PSA). Polysil has two production facilities and a

research and development centre with more than 50 scientists.

"Polysil is excited to join the Elkem family. The management team of Polysil is

very pleased to stay with the company in the next stage. We are confident to

further develop and integrate our business with Elkem's worldwide platform,

bring more value to our customers, and create a brighter future together," says

Hanyong Ma, the current and future general manager of Polysil.

The transaction was announced 30 December 2019. In 2019, Polysil delivered a

total operating revenue of RMB 624 million with earnings after tax of RMB 95

million. The companies have agreed an enterprise value for Polysil of up to RMB

941 million, including potential earn-out dependent on pre-agreed parameters.

All regulatory approvals for the acquisition have been concluded and the

settlement of the transaction took place 1 April 2020. Polysil will be

consolidated into Elkem's financial statement with effect from 1 April 2020.

For further information:

Odd-Geir Lyngstad, VP Finance & Investor Relations

Tel: +47 976 72 806

Email: odd-geir.lyngstad@elkem.no

Fredrik Norman, VP Corporate Communications & Public Affairs

Tel: +47 918 66 567

Email: fredrik.norman@elkem.no

About Elkem

Founded in 1904, Elkem is one of the world's leading suppliers of silicon-based

advanced materials with operations throughout the value chain from quartz to

specialty silicones, as well as attractive market positions in specialty

ferrosilicon alloys and carbon materials. Elkem is a publicly listed company on

the Oslo Stock Exchange (ticker code: ELK) and is headquartered in Oslo. The

company has more than 6,370 employees with 29 production sites and an extensive

network of sales offices worldwide. In 2019 Elkem had revenues of NOK 22.7

billion. To learn more, please visit www.elkem.com