UPDATE 3-Clariant to buy Canada's Lucas Meyer Cosmetics for $810 mln

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To buy Lucas Meyer Cosmetics for $810 million

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Q3 EBITDA CHF 159 million

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Full-year guidance confirmed

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ForEx a "wild card" in Q4 - CFO

(Adds analyst comment in paragraph 5, management comments in paragraphs 11-13)

ZURICH, Oct 30 (Reuters) - Switzerland-based Clariant AG said on Monday it would acquire Canada's Lucas Meyer Cosmetics from International Flavors & Fragrances in an all-cash deal for $810 million.

"By combining our personal care ingredients portfolio with Lucas Meyer Cosmetics, Clariant will become a leader in the high value cosmetic ingredients space, one of the most attractive, profitable, and fastest-growing speciality chemicals markets," Clariant CEO Conrad Keijzer said in a statement.

The deal came as Clariant, whose products are used to make de-icers, food ingredients and skin and health care products, reported a fall in third-quarter sales and core operating profit.

Muted consumer demand, destocking by clients and weak pricing for commodity chemicals have prompted several European chemicals makers to slash their annual outlooks over the last few months.

"All in all, slightly positive," Vontobel analyst Sibylle Bischofberger wrote in a note to investors, adding that the acquisition of Lucas Meyer Cosmetics "makes sense and is good" but is also expensive.

Clariant said it wanted to increase annual sales at Lucas Meyer to around $180 million by 2028 from $100 million at present, after completing the deal in the first quarter of 2024.

It said Lucas Meyer was accretive to Clariant's growth, sales and cash flow. The price represented an enterprise value to EBITDA multiple of 16.3, Clariant said.

Clariant's sales fell 21% to 1.03 billion Swiss francs ($1.14 billion) in the third quarter, while core operating profit (EBITDA) fell 28% lower to 159 million francs.

Analysts had estimated sales of 1.05 billion francs and profit of 145 million in company-provided poll.

Clariant said the economy was unlikely to recover in the last three months of 2023, even as it expects inflation to ease.

CEO Keijzer said it was still seeing a sequential pick-up in volumes across its divisions.

However, Chief Financial Officer Bill Collins warned of the impact of recent volatility in exchange rates and the current global geopolitical situation.

"That's probably the biggest wild card I see going into Q4," he said.

Clariant confirmed its 2023 guidance for sales at 4.55-4.65 billion francs and EBITDA of 650-700 million francs.

($1 = 0.9027 Swiss francs) (Reporting by Gokul Pisharody in Bengaluru, John Revill in Zurich, Antonis Pothitos and Linda Pasquini in Gdansk; editing by Miral Fahmy and Jason Neely)