UK's Elementis to buy SummitReheis to grow personal care chemicals

By Sanjeeban Sarkar

(Reuters) - British speciality chemicals maker Elementis Plc (ELM.L) said on Friday it would buy U.S.-based SummitReheis from an affiliate of private equity firm One Rock Capital Partners LLC for an enterprise value of $360 million (288 million pounds) to expand its personal care chemicals business.

Shares in Elementis rose as much as 9.8 percent to 302.10 pence, before paring some of the gains to trade 6.6 percent higher by 1000 GMT.

"We've got opportunities to grow organically in mature markets as well as emerging markets; going forward we will be opportunistic," Elementis Chief Executive Paul Waterman told Reuters.

Elementis said the deal would increase the annual sales of its personal care chemicals business to $200 million and boost its adjusted earnings in the current financial year.

The deal could also improve the group's margins in the current financial year, the company said, adding it had identified cost synergies of up to $3 million a year.

Elementis said it expected earnings per share for the year ended Dec. 31, 2016 to be in line with current market expectations.

The deal will be funded from cash resources and new debt facilities of $475 million, the company said.

SummitReheis makes personal care chemicals for companies such as Procter & Gamble (PG.N), Colgate (CL.N), Unilever Plc (ULVR.L) and L'Oreal SA (OREP.PA).

(Reporting by Sanjeeban Sarkar in Bengaluru; Editing by Amrutha Gayathri)