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Research Dynamics- Report on CPH: SiliCycle acquisition
02.07.2025 / 18:08 CET/CEST

This report is published by Research Dynamics, an independent research boutique


Zeochem to acquire SiliCycle Inc.

Deal Overview

On July 1, 2025, the CPH Group, through its chemistry division Zeochem, announced an agreement for the acquisition of all substantial assets of SiliCycle Inc., (SiliCycle) a Canada-based global leader in high-value chromatography gels. The purchase price remains undisclosed, but the transaction is expected to be completed in 3QFY25.

This strategic acquisition will help Zeochem integrate SiliCycle's specialised expertise in the development, production, and distribution of sophisticated chromatography gels, primarily utilised in complex separation processes within the pharmaceutical sector. SiliCycle, which reported revenues of CAD 16 million for FY24 with a workforce of around 60 personnel, will be merged into Zeochem.

This acquisition marks a pivotal expansion of CPH Group's product portfolio, specifically enhancing its capabilities in derivatised chromatography gels, which are critical for analytical techniques such as liquid chromatography, prevalent in research and development (R&D) laboratories, process chemistry, and active pharmaceutical ingredient (API) manufacturing. This move aligns with CPH Group's broader global expansion strategy, bringing its total worldwide presence to 15 locations post-acquisition.

Deal Rationale

Zeochem, the chemistry division of the CPH Group, is intrinsically focused on specialised chemical products, with chromatography gels representing a high-value and high-growth segment that is critical to its future trajectory.

SiliCycle possesses a distinct expertise in creating gels with outstanding physical and chemical properties, particularly its derivatised offerings. This niche specialisation provides CPH Group with immediate access to advanced materials and intellectual capital that are difficult to replicate organically. SiliCycle's established market presence and customer base within the pharmaceutical and chemical industries also present a direct pathway for Zeochem to expand its reach in critical, high-barrier-to-entry segments.

For the CPH Group as a whole, the acquisition of SiliCycle is a tangible manifestation of its strategy to expand its global market position by targeting products with high growth potential. This acquisition offers significant opportunities for leveraging synergies in both production capabilities and worldwide distribution networks. Following the acquisition, the CPH Group will operate from 15 locations globally, thereby enhancing its ability to serve a diversified customer base and capitalise on regional growth opportunities. This strategic integration of SiliCycle's specialised offerings into Zeochem's portfolio not only bolsters the chemistry division's revenue and profitability but also reinforces the CPH Group's overarching commitment to cultivating attractive niche markets with above-average growth potential, ultimately enhancing its overall market proposition and long-term shareholder value.

Valuation and conclusion

The Packaging and Chemistry divisions offer a favourable long-term outlook, and the operating results of these divisions are expected to remain resilient. Apart from a supportive outlook, the cost optimisation efforts are expected to result in margin improvement for the EBITDA margins to remain in the 16-18% range going forward, which should lead to solid earnings growth. In addition, the acquisition of high-growth assets like SiliCycle should further boost long-term growth.  

We value CPH using DCF and relative valuation techniques. We are not considering the incremental impact of SiliCycle in our forecast and valuation and would assess its impact after the company announces 1H25 results and the closing of the acquisition. Accordingly, our intrinsic value remains unchanged at CHF 92.5 per share, implying an upside of 25.0% from current levels. For relative valuation, since the Group operates in two entirely different divisions, we compare CPH’s divisions with various sets of relevant industry peers. We have employed three parameters – EV/EBITDA, P/S, and P/E – to analyse the relative valuation of the Group. CPH currently trades at an EV/EBITDA multiple of 7.0x (FY2025e), a 30.0% discount to the weighted average multiple of division peers.

End of Media Release