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Covestro to acquire DSM’s Resins & Functional Materials unit for €1.6B

German polymer company Covestro AG has reached an agreement to buy nutritional science specialist Royal DSM’s Resins & Functional Materials unit for €1.6B. Included in the unit are a number of individual businesses, such as DSM Additive Manufacturing, DSM Niaga, and DSM Advanced Solar.

According to DSM, the transaction is a step towards its evolution as a “purpose-led, science-based company” primarily dealing with nutrition, health, and sustainable living. The move comes following DSM’s recent string of acquisitions of Glycom, Royal CSK, and the Erber Group.

DSM intends to focus more on its health and nutritional businesses following the deal. Photo via DSM.
DSM intends to focus more on its health and nutritional businesses following the deal. Photo via DSM.

The Resins & Functional Materials unit

Resins & Functional Materials (RFM) is composed of a sustainable coatings division as well as a wider functional materials division and mainly provides specialized resins for paints and optical fiber coatings. The more focused Additive Manufacturing business, besides just resins, also produces filaments, granules, and fine powders for a range of 3D printing technologies.

The company’s Somos resin range covers everything from tooling to automotive, through aerospace and consumer goods, whereas its FDM-suitable filaments and granules comprise engineering-grade polyamide and polypropylene materials. Looking at the unit’s SLS powders, Arnite is a blend of high-performance polyester compounds, and Arnilene is polypropylene-based.

SLS 3D printed conveyer belt sprocket made of DSM's Arnilene AM6002. Photo via DSM.
SLS 3D printed conveyer belt sprocket made of DSM’s Arnilene AM6002. Photo via DSM.

Onwards and upwards with Covestro

Covestro believes that by acquiring the RFM unit, it can grow in scale and technological capability, benefiting both its customers and employees. As a whole, the RFM unit was responsible for around €1,012M of DSM’s 2019 total annual net sales and €133M of it’s 2019 total EBITDA (before interest and taxes).

DSM has stated that it expects a book profit on the transaction, as it will receive approximately €1.4B net in cash following the closing of the deal. This figure includes repayment of the unit’s debts, transaction costs, and any payable capital gains tax. Subject to customary conditions and approvals, the deal is expected to close in H1of 2021.

Geraldine Matchett and Dimitri de Vreeze, Co-CEOs of Royal DSM, stated: “The deal delivers strong value to DSM and is strategically attractive for all parties. In Covestro, we recognize a company that shares similar views on culture and the value of sustainability. We know that Covestro will be a good owner of these businesses for customers, colleagues and other stakeholders.”

A 3D printed part made from DSM Novamid AM1030 FR. Photo via DSM.
A 3D printed part made from DSM Novamid AM1030 FR. Photo via DSM.

Only recently, DSM partnered with 3D printed part supplier Nedcam to develop new applications for scalable extrusion-based granulate 3D printing. Following the installation of a CEAD AM Flexbot robotic 3D printer at Nedcam’s facility, the company now plans to offer large-scale commercial 3D printing production services using DSM materials, and so enlisted its help.

Elsewhere, polymer specialist Polymaker, together with Covestro, recently announced the release of its newly jointly developed 3D printable fabrics. The duo sifted through a number of suitable materials for the job but eventually settled on a TPU-based polymer, with two grades – 90A and 95A – being made available.

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Featured image shows a 3D printed part made from DSM Novamid AM1030 FR. Photo via DSM.

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