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Chemical Distribution – Industry and M&A Outlook
Strong value contribution of distributors to both – chemical producers and pro-cessing companies – is leading to persisting market growth
Consolidation set to continue as scale and reach become critical factors
2
Table of contents
Market & competition……………………………………………………………………...1
Overview………………………………………………………………………………………………………… 1
Value contribution of chemical distributors………………………………………………………………. 2
Value chain……………………………………………………………………………………………………... 3
Strong growth expected to persist…………………………………………………………………………. 4
The competitive landscape…………………………………………………………………………………. 5
Consolidating market…………………………………………………………………………………………. 6
Recent transactions in chemical distribution industry……………………………… 7
Most relevant transaction between 01/01/2014 and 01/04/2015……………………………………. 7
Pricing and stock performance………………………………………………………………………...…...14
About M&A International Inc…………………………………………………………....15
About the chemicals & pharmaceuticals industry group……………………………………………. 15
M&A International Inc. case studies in chemical industry……………………………………………. 16
Our industry experts in Germany
DR. LUTZ BECKER Managing Partner
Lutz is particularly active in the area of retail and wholesale sector. He founded
and led the retail group of M&A International Inc. for more than 10 years.
ALI TAŞBAŞI Managing Director
Ali disposes of a broad transaction experience with cross border transactions.
He is Head of Angermann’s Chemical and Pharmaceutical Industry Group.
MATTHIAS KNOKE Senior Consultant
Matthias has extensive M&A experience focusing mainly on transactions in the
engineering, construction and chemical industries.
CHRISTIAN JELLENTRUP Consultant
Christian gained broad knowhow of challenges and success factors of whole-
sale and specialized trade business through several M&A-processes in the past.
1
Market and competition
Overview
The chemical industry, consisting of pro-
duction, distribution and consumption, is
an important driver of the global econo-
my, with estimated global annual con-
sumption of EUR 2,560bn in 2012.
About 90% of the chemical production is
distributed by the production companies, leaving 10% share for (third-
party) distributors. The 10% represents a market of about EUR 165bn
per year as shown in the table below. The market share of (third-party)
distributors is expected to increase as a result of outsourcing.
The (third-party) distribution market consists of specialty (ca. 70bn)
and commodity distribution (ca. 95bn).
Source: BCG, The growing opportunity for chemical distributors, July 2013
Region/MarketNominal GDP
(EURbn)
Chemical
consumption
(EURbn)
Chemicals as
% of GDP
Distribution
relevant
chemical
consumption
(EURbn)
Share of
third-party
distributors
(%)
Size of third-
party
distribution
market
(EURbn)
Europe 16,170 567 3.5% 401 11% 42.9
Germany 2,644 119 4.5% 86 10% 8.5
France 2,029 88 4.3% 56 9% 5.1
United Kingdom 1,901 42 2.2% 26 11% 2.9
Italy 1,569 54 3.4% 47 11% 5.1
Spain 1,066 37 3.4% 24 10% 2.5
Other Western Europe 3,615 121 3.3% 80 9% 6.9
Other Cent ral and Eastern Europe 3,347 106 3.2% 82 15% 11.9
North America 13,613 393 2.9% 215 14% 29.9
Asia-Pacif ic 17,609 1,285 7.3% 894 7% 62.5
Lat in America 4,710 208 4.4% 141 12% 17.3
Middle East 3,403 107 3.1% 81 15% 12.2
Total world 55,504 2,560 4.6% 1,732 10% 164.8
2
Value contribution of chemical distributors
Traditionally, chemical producers distribute their
own products. Direct supply still accounts for
about 90% of total global distribution. Large
end-users will continue to buy directly from the
manufacturer and account for the bulk of pro-
ducers’ output
Dedicated “key account” management struc-
tures and processes have been set up by pro-
ducers to serve these large customers. However,
for smaller customers and countries where producers have limited
operations, most chemical producers struggle to develop an effective
sales model. Particularly as the need for greater cost efficiency has
led to continuing downward pressure on the size of sales forces in the
field and the level of technical assistance offered to customers. By of-
fering efficient logistics for smaller quantities, complemented by val-
ue-added services, chemical distributors reduce complexity for cus-
tomers and suppliers.
As a result of the abovementioned trends, producers are handing
more and more of their marketing of smaller quantities to distributors.
This outsourcing trend is set to continue, despite that some markets of
processing companies are consolidating
Value added to chemical producers Value added to processing companies
Broad product portfolio with comple-
mentary products (often sub-sector spe-
cific)
Access to reputable suppliers
Competitive (and stable) pricing
Stock management and JIT deliveries
Competent and knowledgeable sales
team
Technical support / problem solving skills
Value-added services (e.g. VMI, mixing,
blending, bundling, repacking, formula-
tion)
Easy access to samples
Drum return handling
Financing and credit in line with local
terms
Market share and penetration
Logistics service including storage and
packaging
Market intelligence and transparency
Demand forecasting and planning
Market development capabilities
Trainable staff with good technical
knowledge
Modern IT infrastructure allowing auto-
mated information exchange
Low cost-to-serve for small lots
3
Value chain
The value chain of a distributor starts with the
sourcing, purchase, transport and storage of
sometimes large-scale quantities of diverse
raw materials and ingredients. Key elements in
the value chain of a distributor include: sourc-
ing from the right producers to ensure high
quality and a reliable product offering; taking
physical ownership of products, warehousing
them, and mixing, blending, and repackaging
them according to customers’ needs. Im-
portant elements are the formulating expertise
and technical support from dedicated appli-
cation laboratories. The next step is selling and
physically transporting the goods to custom-
ers. Important issues to take into account with
transporting are:
o Leveraging high route density based on lo-
cal scale
o Providing just-in-time delivery and vendor
managed inventory service
o Taking care of environmental friendly
packaging return or disposal service
o Offering one-stop-shop solutions
Chemical distributors stand apart from logis-
tics-only companies and from trading compa-
nies. Chemical distributors do take ownership
of products and do repack and assemble the
product portfolio according to customer
needs. Also, chemical distributors do offer de-
velopment and testing services for improving
customer products and production processes
The role and added-value services of chemi-
cal distributors play a crucial part in the supply
chain
Bundling, outbound
transport
Producers
Processing companies
Vendor managed inventory
Technical support
Mixing, blending,
formulating
Filling, packaging, labelling
Storage
Inbound transport
Sales, purchase
Ch
em
ica
l d
istr
ibu
tors
4
Strong growth expected to persist
Overall the (third party) chemical distribution market grew between
2008 and 2013 with a CAGR of 6.5%, divided between the two seg-
ments commodity (+6.2%) and specialty chemical (+7.0%).1
The distribution market grew, amongst others, due to an increase in
chemical consumption and outsourcing. The latter is a result of the
factors listed below:
The growth of (third party) chemical distribution as a result of increas-
ing chemical consumption and outsourcing is expected to persist with
a CAGR of 5.6% from 2013 to 2018.
Reduce complexity
Producers turn to distributors for distribution to reduce complexity, especially in mar-
kets with a fragmented customer base (such as emerging markets) or with smaller
order sizes (especially in specialty chemicals)
Value-added services
Value-added services, such as outsourced inventory management, blending and
formulation, are increasingly important to producers and often drive their choice of
distributor
Increasing standards
International distributors are better equipped to meet increasing quality standards,
as they have segment-specific expertise
Access to new markets
Producers turn to distributors to improve market access and geographical reach,
especially in emerging markets
Streamline financials
Producers want to reduce costs; outsourcing eliminates the need for an extensive
sales organisation. Also, by outsourcing to distributors producers can manage their
working capital more effectively
40
70
100
130
2008 2009 2010 2011 2012 2013 2014F 2015F2016F 2017F 2018F
EURb
n
Specialty Commodity
5
The competitive landscape
• Despite the consolidation we have seen,
the chemical distribution market is frag-
mented with more than 10,000 distribu-
tors globally across a range of technical
categories, including petrochemicals,
solvents, polymers and specialty chemi-
cals.
• The market can be divided into two
segments:
o Commodity: This group is focused on
bulk products and can be seen as
wholesalers. The largest two are
Brenntag and Univar. They are the on-
ly chemical distributors which have a
leading position in Europe as well as
North America. Together they have
17 % market share in Europe and 12%
in North America.
o Specialty: This group is focused on be-
ing a value adding distribution part-
ner, with the largest European being
IMCD, Azelis, Biesterfeld, Stockmeier,
Barentz and Caldic.
• As mentioned before, there is a main
trend whereby companies move to-
wards global distributors and make a
choice between being a commodity or
specialty distributor
• Both segments have distinctly different
business models:
Product range
Product range
Specialty
Commodity
High volume, large parties
Purchasing power
Broad global presence
Wholesaler
Transparent price setting
Exclusive contracts
Regional scale, local reach
Value adding services
Culture of dialogue
Specialty
Key success factors
Commodity
Reg
ion
al
Pre
sen
ce
European competitive field
Pan
-Eu
rop
ean
Commodity Specialty
Global competitive field
Pre
sen
ce
Reg
ion
al
Glo
bal
6
Consolidating market
In the past decade, the third party chemical distribution market has
been consolidating. The largest consolidation took place in Europe
and North America. Since 1991, the four most acquisitive companies
(Brenntag, Azelis, IMCD and Univar) completed over 200 acquisitions
However, all debt financed deals came to a standstill during the crisis
of 2008−2009, which caused a decrease in M&A activity
In 2010 M&A picked up again in all regions. Europe is still the continent
which shows the majority of the transactions due to the maturity of the
industry
Source: DistriConsult, Capital IQ, Mergermarket, ICIS, BCG, Deloitte
The consolidation in chemical distribution market is set to continue:
o Reduction in the number of distributors relationships maintained by
principals
o Expanding geographical coverage as required by both principals
and clients
o Extending product portfolio coverage in application or end-use
segment in order to offer a one-stop-shop
o Extending capabilities such as blending and formulating in order to
be a full service provider
o Realize economies of scale
3
20
25 26 27
36
0
10
20
30
40
2009 2010 2011 2012 2013 2014
Europe North America Asia-Pacif ic Latin America Middle East / Africa
M&A transactions over the years
7
Recent transactions in chemical distribution industry
Since January 2014 there have been more than 50 disclosed transac-
tions in the global chemical distribution industry. Most active acquirers
have been Brenntag AG (6 acquisitions), Barentz B.V. (2) and Univar
Inc. (2)
Consolidation is driven by European and Northern American players
focussing mainly on geographical and portfolio extension
Interest of Private Equity Investors remained strong as ongoing consol-
idation
Details on deal value were kept confidential apart from exceptional
cases
Most relevant transaction between 01/01/2014 - 01/04/2015:
Acquirer
Univar USA Inc.
Target
Key Chemical Inc.
Strategic rationale
Univar USA Inc. a leading distributor of basic chemicals, specialty
products, and related chemistry services, announced today it has
acquired all of the outstanding stock of Key Chemical, Inc., one of
the largest suppliers of hydrofluosilicic acid (fluoride) in the U.S. Key
Chemical helps strengthen Univar's leading position in the munici-
pal water treatment market by adding fluoride to our offering to
customers.
Deal type
Strategic:
portfolio &
scale
Date
Apr. 2015
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
undisclosed Family Office
Target
Barentz B.V.
Strategic rationale
An undisclosed bidder has acquired an undisclosed stake in
Barentz B.V., the Netherlands-based company engaged in market-
ing and distribution of specialty and commodity raw materials. The
transaction is in line with Barentz’s strategy to expand its product
portfolio. The funds from the acquisition would be used to expand
Barentz reach, growth, and presence globally.
Deal type
PE
Date
Mar. 2015
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
8
Acquirer
Calcid Canada Inc.
Target
The Ingredient Company Inc.
Strategic rationale
Calcid Canada Inc., the Canada-based manufacturer and distrib-
utor of ingredients and additives and a subsidiary of Calcid B.V.,
has acquired The Ingredient Company Inc., the Canada-based
distributor of savoury and nutrition ingredients. The acquisition will
enable Caldic to enhance its footprint in the Canadian food in-
gredient market and further in the Savoury and Nutrition market
sectors.
Deal type
Strategic:
portfolio
Date
Mar. 2015
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Brenntag AG
Target
Lionheart Chemical Enterprises Ltd
Strategic rationale
Brenntag AG has agreed to acquire Lionheart Chemical Enterprises
(Pty) Ltd, the South Africa-based company engaged in distribution
of food & beverage products. The acquisition will strengthen
Brenntag’s position in the South African chemical distribution mar-
ket. The acquisition of Lionheart’s product portfolio is complemen-
tary to other activities of Brenntag in the region through Multisol
and Crest Industrial Chemical businesses.
Deal type
Strategic:
portfolio
Date
Feb. 2015
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Apax Partners LLP
Target
Azelis S.A.
Strategic rationale
Apax Partners LLP, UK-based private equity firm has agreed to ac-
quire a majority stake in Azelis SA, Belgium based distributor of spe-
ciality chemicals, polymers and related services. The transaction
will expand Azelis' business operations and develop its specialist
product portfolio. Post transaction, Mr. Hans-Joachim Muller, the
CEO of Azelis together with management will remain with compa-
ny.
Deal type
PE
Date
Feb. 2015
(pending)
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Brenntag AG
Target
Surtiquimicos S.A.
Strategic rationale
Brenntag AG has agreed to acquire Surtiquimicos S.A., the Colom-
bia-based distributor of specialty chemicals. The transaction is in
line with Brenntag's strategy to increase its presence in Latin Ameri-
ca. The transaction will enable Surtiquimicos to further develop its
portfolio in Colombia, thereby strengthening its position in the re-
gion.
Deal type
Strategic:
portfolio &
geography
Date
Dec. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
9
Acquirer
Umicore SA
Target
Todini & Co. S.p.A.
Strategic rationale
Umicore SA the Belgium-based materials technology group,
through its Luxembourg-based wholly owned subsidiary Umicore
International, has agreed to acquire the remaining 52% stake in
Todini and Co. S.p.A., the Italy-based company engaged in distri-
bution of industrial chemical products. The transaction will enable
Umicore to further expand it's activities and strengthen the product
portfolio.
Deal type
Strategic:
forward
integration
Date
Dec. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Brenntag AG
Target
Fred Holmberg & CO AB
Strategic rationale
Brenntag AG has agreed to acquire Fred Holmberg & Co AB, the
Sweden-based company engaged in distribution and trading of
chemicals and providing mixing and blending activities. The acqui-
sition will further strengthen and expand Brenntag’s industrial chem-
icals portfolio in the Sweden, resulting into increase in product of-
ferings to its customers and adding value for Brenntag’s business
partners.
Deal type
Strategic:
portfolio
Date
Dec. 2014
(closed)
Deal value (mEUR)
78
EBITDA-Multiple
35
Acquirer
The Riverside Company
Target
Drex-chem (m) Sdn Bhd
Strategic rationale
The Riverside Company, US-based private equity firm, has acquired
Drex-chem (m) Sdn Bhd, Malaysia-based distributor of specialty
chemicals. The transaction helps Riverside to expand geograph-
ically with the strong technical capabilities and knowledgeable
sales force of Drex-Chem in the ASEAN region.
Deal type
PE
Date
Dec. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Univar Brasil Ltda. (Univar Inc.)
Target
D’Altomare Quimica Ltda.
Strategic rationale
Univar Brasil Ltda., the Brazil-based distributor of specialty chemicals
and ingredients, and subsidiary of Univar Inc., the US-based com-
pany engaged in distribution and marketing of commodity and
specialty chemicals, has acquired D'Altomare Quimica Ltda, the
Brazil-based distributor of specialty chemicals and ingredients.
The acquisition will enable Univar to expand its geographic foot-
print and market presence in Brazil and across Latin America.
Deal type
Strategic:
scale
Date
Nov. 2014
Deal value (mEUR)
40 (est.)
EBITDA-Multiple
undisclosed
10
Acquirer
Advent International Corporation
Target
Grupo Transmerquim, S.A.
Strategic rationale
Advent International Corporation, the US-based venture capital
and private equity firm, has agreed to acquire Grupo Transmer-
quim, S.A. (GTM), the Costa Rica-based company commercializes
and distributes raw materials and chemical products. The transac-
tion will provide growth opportunities to GTM and enable it to ex-
pand its operations in Latin America. Post transaction, the existing
management team of GTM will continue with the company.
Deal type
PE
Date
Nov. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Sagard Private Equity Partners
Target
Safic-Alcan Groupe
Strategic rationale
Sagard Private Equity Partners has acquired Safic-Alcan Groupe,
the France-based distributor of specialty chemicals. Safic-Alcan is
an international distributor of speciality chemicals with presence in
all of Western Europe. The group is a leader in the rubber market
and keeps on developing in Coatings and Fine Chemicals to
strengthen and gain new positions.
Deal type
PE
Date
Oct. 2014
Deal value (mEUR)
250 (est.)
EBITDA-Multiple
undisclosed
Acquirer
Brenntag AG
Target
Pioma Chemicals Pvt. Ltd.
Strategic rationale
Brenntag AG has agreed to acquire the Specialties chemicals
distribution business of Pioma Chemicals Pvt. Ltd., India-based dis-
tributor and supplier of specialty excipients and functional ingredi-
ents. This transaction is in line with Brenntag’s strategy of solidifying
its business in India by increasing its reach of local strategic distribu-
tors, customer relations and strengthening its portfolio of high quali-
ty products.
Deal type
Strategic:
geography
Date
Sep. 2014
Deal value (mEUR)
26
EBITDA-Multiple
undisclosed
Acquirer
IMCD Group B.V.
Target
Danasia Inc.
Strategic rationale
IMCD Group B.V., the Netherlands-based company engaged in
marketing, distribution, and sale of specialty chemicals and food
ingredients, has acquired Danasia, Inc., the Philippines-based im-
porter and distributor of the leading brands of raw food and indus-
trial ingredients. The acquisition marks the initial entry of IMCD in the
Philippines’ market. The transaction will provide IMCD with a valua-
ble platform to expand and strengthen its presence.
Deal type
Strategic:
geography
Date
Sep. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
11
Acquirer
Composites One LLC
Target
Composite Business, Nexeo Inc. LLC
Strategic rationale
Composites One LLC, the US-based company engaged in the dis-
tribution of composite materials, has agreed to acquire Compo-
sites Distribution Business of Nexeo Solutions, LLC, the US-based dis-
tributor of chemicals, plastics and composites. The acquired busi-
ness generated revenue between USD 250m and 300m. The acqui-
sition will enable Composites One to offer wide-ranging product
line, innovative technical support and dependable service.
Deal type
Strategic:
scale &
portfolio
Date
Jul. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Peter Greven GmbH & Co. KG
Target
REDA Chemicals
Strategic rationale
Peter Greven GmbH & Co. KG, the Germany-based producer and
supplier of oleochemical additives and auxiliaries, has acquired
REDA Chemicals, the Saudi Arabia-based company engaged in
distribution of chemicals, from REDA Group, the Saudi Arabia-
based company engaged in marketing and distribution of industri-
al and specialty chemicals, food ingredients, fire and safety
equipment, and technology based solutions.
Deal type
Strategic:
geography
Date
Jul. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Brenntag AG
Target
Pillchem Inc.
Strategic rationale
Brenntag AG has acquired Philchem, Inc., a US-based manufac-
turer and supplier of dry blends and adhesives, from Performance
Chemicals Intermediate Holding Company. Philchem reported
revenues of USD 162m in 2013. The transaction is expected to bene-
fit the customers and suppliers of Brenntag. The acquisition will
fetch deliberate competencies to Brenntag and expand further
expand its foot prints in North America.
Deal type
Strategic:
scale & effi-
ciencies
Date
Jun. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Barentz B.V.
Target
MP Maustepalevu Oy
Strategic rationale
Barentz B.V., the Netherlands-based company engaged in market-
ing and distribution of specialty and commodity chemicals has
acquired MP Maustepalvelu Oy, the Finland-based supplier of food
ingredients. The acquisition will enable Barentz to offer more choic-
es in Blends and will also provide their customers with one stop
shopping experience. The transaction is a result of Barentz’s search
to reinforce their research and development.
Deal type
Strategic:
backward
integration
Date
Jun. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
12
Acquirer
DKSH Holding AG
Target
Zeus Quimica S.A.
Strategic rationale
DKSH Holding AG has acquired Zeus Quimica S.A., the Spain-based
specialty chemicals distributor. Zeus generated revenues of EUR
40.79m in 2013. This acquisition is part of the strategy of consolidat-
ing of the chemical distribution industry. Via this acquisition DKSH is
moving forward to become a pan-European Market Expansion
Services provider. DKSH’s clients will now be able to make use of
Zeus service portfolio on the Iberian Peninsula region.
Deal type
Strategic:
portfolio &
scale
Date
Jun. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Krahn Chemie
Target
Pietro Carini S.p.A.
Strategic rationale
Krahn Chemie GmbH, the Germany based distributor of chemical
raw materials and specialty chemicals, has agreed to acquire
Pietro Carini S.p.A., the Italy based specialty chemical distributor.
KRAHN will expand into Italy through this acquisition. Pietro Carini
employs 27 people and has 1,100 active customers.
Deal type
Strategic:
geography
Date
Apr. 2014
Deal value (mEUR)
20 (est.)
EBITDA-Multiple
undisclosed
Acquirer
Brenntag AG
Target
Gafor Distribuidora
Strategic rationale
Brenntag AG has agreed to acquire Gafor Distribuidora, the Brazil
based chemical distribution company. The acquisition will allow
Brenntag to expand their market presence in Brazil and will add
critical mass to their existing operation in Latin America. Gafor
generated USD 70m in revenue in 2013.
Deal type
Strategic:
portfolio
Date
Apr. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
IMCD Group B.V.
Target
Kushalchand Sons
Strategic rationale
IMCD Group B.V., the Netherlands-based company engaged in
marketing, distribution, and sale of specialty chemicals and food
ingredients, has acquired Kushalchand Sons, the India-based dis-
tributor of food speciality ingredients to the fast growing processed
food industry. Kushalchand Sons generated revenues of EUR 9m in
2014. The acquisition is in line with IMCD’s strategy of expanding its
food processing business in India.
Deal type
Strategic:
scale
Date
Apr. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
13
Acquirer
Barentz B.V.
Target
Additive Solutions Pty Ltd.
Strategic rationale
Barentz B.V., the Netherlands-based company engaged in market-
ing and distribution of specialty and commodity chemicals has
acquired a majority stake in Additive Solutions Pty Ltd, the Australia-
based company engaged in marketing specialty ingredients to
various sectors. Barentz expands its business in Australia and New
Zealand with the acquisition. Additive Solution will also distribute
the LI Frank and Vitablend ingredients and products.
Deal type
Strategic:
geography
Date
Apr. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Helm AG
Target
GEBLASA S.A.
Strategic rationale
Helm AG, the Germany based distribution company specializing in
chemicals, has acquired GEBLASA S.A., the Spain-based distributor
specialized in the distribution of Acids and Lyes as well as Solvents.
To support its future growth GEBLASA S.A. will enhance HELM’s
strong position in the Mediterranean Region.
Deal type
Strategic:
geography
Date
Apr. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
Acquirer
Nexeo Solutions LLC
Target
Archway Sales Inc. & Jacaab LLC
Strategic rationale
Nexeo Solutions, LLC has agreed to acquire Archway Sales, Inc.
and Jacaab LLC. Nexeo Solutions, LLC, the US based company, is a
distributor of chemicals, plastics, and composites. Archway Sales,
Inc., the US based company, is engaged in selling and distributing
specialty chemical products. Jacaab LLC, the US based company
is engaged in operating as a chemical manufacturer.
Deal type
Strategic
Date
Feb. 2014
Deal value (mEUR)
125
EBITDA-Multiple
9,6
Acquirer
Management Team
Target
Alphamin S.A.
Strategic rationale
The management of Alphamin S.A., the Belgium based distributor
of speciality polymers and waxes, has agreed to acquire the com-
pany, in a management buyout transaction. The management
team is led by Mr. Marc Beuken, the CEO of Alphamin S.A. Al-
phamin reported revenues of EUR 36.50m and EBIT of EUR 2.3m.
Deal type
MBO
Date
Jan. 2014
Deal value (mEUR)
undisclosed
EBITDA-Multiple
undisclosed
14
Pricing and stock performance
Double-digit Trading multiples
Average acquisition multi-
ples of chemical distributors
during 2010-2014 were
around 7.5xEBITDA. Large
companies were generally
speaking sold for higher mul-
tiples and vice versa
High trading multiples of
large listed chemical distribu-
tors allow value creation
through acquisitions
Double digit trading multiples
create a favorable IPO envi-
ronment:
On 27 July 2014, IMCD
launched an IPO on the Eu-
ronext Amsterdam Stock Ex-
change
Univar announced it is in the
process of launching an IPO.
However, timing of the IPO is
uncertain as many of its cli-
ents are hurt by the recent
collapse of crude oil prices
90
95
100
105
110
115
120
125
130
135
140
3-1
0-1
4
17-1
0-1
4
31-1
0-1
4
14-1
1-1
4
28-1
1-1
4
12-1
2-1
4
26-1
2-1
4
9-0
1-1
5
23-0
1-1
5
6-0
2-1
5
20-0
2-1
5
6-0
3-1
5
20-0
3-1
5
3-0
4-1
5
MSCI WORLD Aceto Corp IMCD NV Brenntag AG
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E
EV/EBITDA multiples
Aceto Brenntag IMCD Median
15
About M&A International Inc.
World’s oldest and largest organization
of independent M&A consultancies and
investment banking firms
650 consultants in 42 countries offer a
global coverage by providing access to
a variety of investors
In the last five years, more than 1,400
transactions totaling to more than US $75
billion in transaction value
Clear internal regulations and over 30 years of experience ensure the
smooth course of the project and mean cost and process transpar-
ency for the client
Flat hierarchies and short communication channels allow a high flexi-
bility and rapid response capability
Several times a year the consultants of MAI meet face-to-face to pro-
fessionalize the cooperation
Within M&A International, industry experts of several countries have
formed industry groups to bundle their local market expertise.
About the chemicals & pharmaceuticals industry group
The chemical and pharmaceuticals group focuses on offering advisory
services to companies in the chemicals, pharmaceuticals and related
industries.
The chemicals and pharmaceuticals group con-
sists of a highly experienced team, which is well-
versed in advising transactions alongside the
whole value chain of chemicals – from chemical
production via distribution through to processing.
Further, due to our extensive contacts to leading
international players in the market, M&A Interna-
tional is well positioned to advise complex, inter-
national transactions as impressively shown by
the following case studies:
16
M&A International Inc. case studies in chemical industry
Holland Corporate Finance (The Netherlands)
advised capital increase of Barentz B.V.
Barentz, a leading distributor of ingredients, is
pleased to announce that it has found a strong
equity partner with the assistance of Holland Cor-
porate Finance/M&A International Inc.
The ingredients distribution market has seen major
consolidation activities in the past decade. Hidde
van der Wal, CEO of Barentz International, com-
ments: “The consolidation trend in the distribution
business is driven by, among others, the reduction
of distributor relationships maintained by suppliers
and a globalization of the industry, which force
ingredients distributors to increase their geograph-
ical reach and expand their product portfolio in
order to achieve critical mass and realize econo-
mies of scale. These drivers are expected to result
in a further consolidation in the coming years.”
Barentz has had an active role in the market consolidation, which in-
cluded the successful acquisitions of Vitablend (2008), Agri Nutrition
(2008), Forum Products (2011) and Maustepalvelu (2014). The majority
participations in RFI (2011), Prochifar (2012), NK Chemicals (2013) and
Additive Solutions (2014) have enabled Barentz to strengthen its market
position and expand its geographical reach.
Marc van de Put, partner at Holland Corporate Finance, adds: “We are
pleased that Barentz can kick off the year with a capital investment from
a strong equity partner which perfectly fits with the Barentz culture. Our
next step together is to find suitable acquisition candidates in Barentz’
core distribution markets in the food & nutrition, pharmaceutical, per-
sonal care and animal nutrition industries in order to accelerate the
growth strategy of Barentz.”
Hidde van der Wal concludes: “We are delighted with this new capital
investment to strengthen our position in a number of promising markets.
With a full product portfolio and extended geographical coverage with-
in reach, we look forward to serving our customers and stakeholders
even better.”
17
Arietti & Partners (Italy), Audon Partners
(Denmark) and Avantus (Sweden) advised
Azelis SA on the acquisition of Brøste A/S
Brøste has joined the pan-European chemicals
distribution group Azelis in a deal that will pro-
vide Azelis with geographic coverage of the
important Nordic region.
Arietti & Partners, M&A International’s Italian
partner who had previously advised Azelis on an
acquisition in Germany, was appointed as lead
advisor in conjunction with M&A International’s
Danish and Swedish partners, Audon Partners
and Avantus Corporate Finance.
Brøste, the leading distributor of additives, in-
gredients and raw materials in the North Euro-
pean market, has a turnover exceeding 120
million and supplies chemicals from blue chip
producers.
Angermann M&A International (Germany)
advised Langley Holding on the acquisition
of DC Druck plus Beteiligungs GmbH
The Langley Holdings plc (Langley) has pur-
chased, through its subsidiary Sheetfed Holdings
Limited, all shares of DC plus Beteiligungs GmbH
(DC) from the insolvency receiver Dr. Jan
Markus Plathner (Brinkmann & Partner). Financial
details have not been disclosed.
DC is the one-stop-shop for its customers offer-
ing a unique combination of products and ser-
vices. The company's product portfolio covers
almost all chemicals and consumables required
by a printing company within its press room.
Besides its products, DC also takes care of the
waste management for its customers and offers
reverse logistic services.
18
For any further information and a confidential discussion about
company divesture, acquisition or succession planning, please do
not hesitate to arrange an appointment with our sector experts:
www.angermann-ma.de www.mergers.net
[email protected] [email protected]
[email protected] [email protected]
[email protected] [email protected]
ABC-Straße 35
20354, Hamburg
Fon: +49 40 3 49 14 - 0
Fax: +49 40 3 49 14-149
Hamburg Frankfurt Stuttgart
Campus Kronberg
61476, Kronberg
Fon: +49 6173 7 02-115
Fax: +49 6173 7 02-333
Bolzstraße 3
70173, Stuttgart
Fon: +49 711 22 45 15-12
Fax: +49 711 22 45 15-10
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