Elementis invests in antiperspirant actives

Who knew that helping stop underarm sweat could be so profitable?

The British chemical maker Elementis has agreed to acquire SummitReheis, a leading manufacturer of aluminum-based active ingredients used in antiperspirants, in a deal that values Summit at $360 million. It’s a tidy sum for a business that had sales last year of $134 million.

The seller is One Rock Capital, an investment company that acquired U.S.-based Summit in 2013 for an undisclosed amount. Under One Rock’s ownership, Summit acquired a similar European business and reopened a plant in Wallkill, N.Y.

An Elementis investor presentation provides an education in the antiperspirants business. Europeans, it seems, favor aerosols, whereas Americans like sticks. Aluminum chlorohydrate can be used in both products. Aluminum zirconium chlorohydrex gly is the key ingredient in most stick products but isn’t used in aerosols. Both chemicals work by mixing with sweat to form a gel that plugs sweat glands.

Three quarters of Summit’s sales are in North America and Europe, but Elementis sees growth opportunities in places such as Latin America, where antiperspirants and deodorants are used by 40% of the population, compared to 80% in North America.

Elementis will merge Summit with some of its existing products to create a $200 million personal care ingredients business. The company anticipates synergies with its hectorite clays, which are added to aerosols to improve the effectiveness of aluminum chlorohydrate, and with its Rheoluxe polymeric rheology modifiers.