Sika Expands US Presence with HPS Acquisition

Sika, a leading specialty chemicals company, has recently announced the acquisition of HPS North America, Inc., a successful supplier of building finishing materials. This strategic move will significantly strengthen Sika's position in the growing US market for building finishing products. Here's what investors need to know about this acquisition and its potential impact on Sika's growth strategy.



Market Penetration and Product Portfolio Expansion

The acquisition of HPS brings several strategic benefits to Sika, including:

1. Market Penetration: HPS's established distribution network and customer base in the large and fast-growing California market will strengthen Sika's presence in the region. This will enable Sika to "go full speed ahead in developing our business relationships and distribution networks in the building finishing area" (Mike Campion, Regional Manager Americas).
2. Product Portfolio Expansion: HPS's product portfolio, which includes self-leveling and waterproofing solutions, will complement Sika's existing product offerings, providing customers with a broader range of solutions for flooring applications. This will create exciting cross-selling opportunities in the flooring industry and lead to significant efficiency gains in logistics and production.

Operational Efficiency and Synergies

The full integration of HPS's business into Sika USA will lead to significant efficiency gains in logistics and production. This is because Sika will be able to leverage its existing infrastructure and resources to support HPS's operations. By consolidating HPS's business under Sika ownership, the company will be able to eliminate duplicate costs and improve overall operational efficiency.

Contribution to Sika's Growth Strategy

The acquisition of HPS North America, Inc. by Sika will contribute to the company's overall growth strategy by:

- Expanding Sika's market share in the growing building finishing segment in the USA.
- Enhancing Sika's product portfolio, allowing the company to offer a more comprehensive range of solutions to its customers.
- Improving operational efficiency, which will help Sika achieve its target of increasing operating free cash flow to over 10% (as a % of net sales) by 2028.

In conclusion, the acquisition of HPS North America, Inc. by Sika will strengthen the company's market position, expand its product portfolio, and improve operational efficiency, all of which are key components of Sika's growth strategy. By leveraging the strategic benefits of this acquisition, Sika is well-positioned to continue its growth trajectory and deliver value to its shareholders.