Mergers & Acquisitions
December 1, 2022
EVERCHEM UPDATE: VOL. 06 – Private Equity Kings
Dry powder in abundance, the PE boys are looking to partner with like-minded entrepreneurs to build platforms of scale, promising the power of a national operation while keeping local relationships and an entrepreneurial culture. [Company Name] could be an excellent partner.
Subscribe to the Urethane blog for more Everchem Updates here
November 30, 2022
Getting Serious
Brenntag confirms intention of acquiring Univar Solutions
US – Brenntag, a global market leader in chemical and ingredient distribution, has confirmed the possibilities of a mega-merger in global chemical distribution after it held preliminary discussions with Univar Solutions over a potential acquisition.
Although the two giants remain guarded about the details of exploring this possible takeover deal, Univar Solutions confirmed that it has received a preliminary indication of interest from Brenntag regarding a potential transaction.
“The company does not intend to make any additional comments regarding this matter unless and until it is appropriate to do so,” a Univar Solutions statement says.
This comes after Brenntag chief executive Christian Kohlpain had earlier hinted the company was eyeing mergers and acquisitions, looking to double annual spending in this direction.
“Brenntag sees strategic mergers and acquisitions as an enabler of future growth and thus will double the annual planned M&A spend to around €400 to €500 million (US$419 to US$524 million),” he said earlier this month as part of the highlighting of Brenntag’s growth strategy plans and targets for 2026.
The German ingredient giant said its acquisition strategy will be focused on five key pillars, such as accelerating growth in Life Sciences globally, enhancing strategic capabilities and market positions, expanding positions in emerging markets in both divisions, filling white spots to complement the existing portfolio and improving tech capabilities that enable efficiency gains.
The strategy marks “the next chapter of transformation” and clarified its intention to “shape the future of its industry.”
In its Q3 results, Brenntag posted a higher-than-expected third-quarter profit on Wednesday, saying it was able to balance European and global supply chains as rising energy costs affected the continent.
The group, whose services include storing large-scale quantities of chemicals and repackaging them into smaller quantities, had quarterly operating earnings before interests, taxes, depreciation, and amortization (EBITDA) rise of 34% to 460 million euros (US$463 million).
Brenntag affirmed an expectation to reach the upper range of its 2022 guidance of 1.75 billion to 1.85 billion euros in operating EBITDA.
At the beginning of November, Univar Solutions also reported its third-quarter 2022 highlights, which showed a substantial net income of US$130 million, 54% higher than the US$84.4 million reported in the prior year.
Univar Solutions – which changed its name to Univar Solutions following the acquisition of Nexeo Solutions in 2019 – also reported net sales of US$3 billion.
The announcement of the potential takeover has sparked a lot of debate in the market considering that the merger appears viable from an antitrust standpoint in a highly fragmented market.
“While Brenntag and Univar are respectively the #1 and #2 global chemical distributors, the industry remains highly fragmented, meaning combined market shares appear manageable in our view,” said Joshua Spector, Americas chemicals analyst at UBS, in a research note.
The UBS analyst added that only around 10% of total chemical sales go through distributors, and within this slice of the pie, a combined Brenntag/Univar would represent only 8% of global chemical distribution sales.
Fermium Research analyst Frank Mitsch pointed to Univar’s improving prospects after integrating the Nexeo acquisition and completing a challenging SAP enterprise software implementation, along with its limited exposure to more troubled areas outside the Americas with less than 20% of sales in EMEA and Asia, as attractive features from an investment perspective.
www.foodbusinessafrica.com/brenntag-confirms-intentions-of-acquiring-univar-solutions/
November 30, 2022
Getting Serious
Brenntag confirms intention of acquiring Univar Solutions
US – Brenntag, a global market leader in chemical and ingredient distribution, has confirmed the possibilities of a mega-merger in global chemical distribution after it held preliminary discussions with Univar Solutions over a potential acquisition.
Although the two giants remain guarded about the details of exploring this possible takeover deal, Univar Solutions confirmed that it has received a preliminary indication of interest from Brenntag regarding a potential transaction.
“The company does not intend to make any additional comments regarding this matter unless and until it is appropriate to do so,” a Univar Solutions statement says.
This comes after Brenntag chief executive Christian Kohlpain had earlier hinted the company was eyeing mergers and acquisitions, looking to double annual spending in this direction.
“Brenntag sees strategic mergers and acquisitions as an enabler of future growth and thus will double the annual planned M&A spend to around €400 to €500 million (US$419 to US$524 million),” he said earlier this month as part of the highlighting of Brenntag’s growth strategy plans and targets for 2026.
The German ingredient giant said its acquisition strategy will be focused on five key pillars, such as accelerating growth in Life Sciences globally, enhancing strategic capabilities and market positions, expanding positions in emerging markets in both divisions, filling white spots to complement the existing portfolio and improving tech capabilities that enable efficiency gains.
The strategy marks “the next chapter of transformation” and clarified its intention to “shape the future of its industry.”
In its Q3 results, Brenntag posted a higher-than-expected third-quarter profit on Wednesday, saying it was able to balance European and global supply chains as rising energy costs affected the continent.
The group, whose services include storing large-scale quantities of chemicals and repackaging them into smaller quantities, had quarterly operating earnings before interests, taxes, depreciation, and amortization (EBITDA) rise of 34% to 460 million euros (US$463 million).
Brenntag affirmed an expectation to reach the upper range of its 2022 guidance of 1.75 billion to 1.85 billion euros in operating EBITDA.
At the beginning of November, Univar Solutions also reported its third-quarter 2022 highlights, which showed a substantial net income of US$130 million, 54% higher than the US$84.4 million reported in the prior year.
Univar Solutions – which changed its name to Univar Solutions following the acquisition of Nexeo Solutions in 2019 – also reported net sales of US$3 billion.
The announcement of the potential takeover has sparked a lot of debate in the market considering that the merger appears viable from an antitrust standpoint in a highly fragmented market.
“While Brenntag and Univar are respectively the #1 and #2 global chemical distributors, the industry remains highly fragmented, meaning combined market shares appear manageable in our view,” said Joshua Spector, Americas chemicals analyst at UBS, in a research note.
The UBS analyst added that only around 10% of total chemical sales go through distributors, and within this slice of the pie, a combined Brenntag/Univar would represent only 8% of global chemical distribution sales.
Fermium Research analyst Frank Mitsch pointed to Univar’s improving prospects after integrating the Nexeo acquisition and completing a challenging SAP enterprise software implementation, along with its limited exposure to more troubled areas outside the Americas with less than 20% of sales in EMEA and Asia, as attractive features from an investment perspective.
www.foodbusinessafrica.com/brenntag-confirms-intentions-of-acquiring-univar-solutions/
November 26, 2022
Wow
Brenntag Is Said to Explore Takeover of Chemicals Rival Univar
Michelle F. Davis, Kiel Porter and Aaron Kirchfeld, Bloomberg News
(Bloomberg) — Germany’s Brenntag SE is exploring a potential acquisition of US rival Univar Solutions Inc. that would cement its position as the world’s biggest chemical distributor and create a company with more than $30 billion in sales, people familiar with the matter said.
The two firms have held preliminary talks about the feasibility of a combination, the people said, asking not to be identified because the matter is private. If discussions go smoothly, Brenntag and Univar may decide as soon as the next couple months whether to proceed with a transaction, the people said.
Brenntag has declined 14% this year, valuing the Essen-based firm at €10.6 billion ($11 billion). Downers Grove, Illinois-based Univar is up more than 9%, giving it a market capitalization of more than $5 billion.
Deliberations are at a preliminary stage and there’s no certainty they will lead to a transaction, the people said. Representatives for Brenntag and Univar couldn’t immediately comment.
The potential tie-up would rank as a top three transaction in the chemical industry this year and mark a late bright spot for big cross-border dealmaking. Global mergers and acquisitions are down almost 30% this year to $2.4 trillion, according to data compiled by Bloomberg, hurt by economic headwinds and difficult financing markets.
While Brenntag is a serial acquirer of smaller assets, a Univar takeover would mark its largest purchase by far and be a bold move for Chief Executive Officer Christian Kohlpaintner. The German company unveiled a new growth plan earlier this month to “shape the future of its industry” including organic re-investments and “value creating M&A activities.”
Univar is no stranger to dealmaking itself. It merged with rival Nexeo Solutions Inc. in 2018 and then sold its plastics business in 2019. David Jukes has served as Univar’s CEO since 2018.
A combination would create an opportunity to boost growth and cut costs, but could also face tough antitrust reviews as national governments more closely scrutinize sector tie-ups.
Brenntag reported $20.3 billion of sales over the trailing 12 months, compared with $11.4 billion at Univar, according to data compiled by Bloomberg. The German company is the global market leader in chemical and ingredients distribution with over 17,000 employees in 78 companies, according to its website.
Univar boasts one of the industry’s largest private transportation fleets as well as a sales force and logistics team that helps connect chemical makers and buyers across sectors.
–With assistance from Eyk Henning and Dinesh Nair.
©2022 Bloomberg L.P.
https://www.bnnbloomberg.ca/brenntag-is-said-to-explore-takeover-of-chemicals-rival-univar-1.1851291
November 26, 2022
Wow
Brenntag Is Said to Explore Takeover of Chemicals Rival Univar
Michelle F. Davis, Kiel Porter and Aaron Kirchfeld, Bloomberg News
(Bloomberg) — Germany’s Brenntag SE is exploring a potential acquisition of US rival Univar Solutions Inc. that would cement its position as the world’s biggest chemical distributor and create a company with more than $30 billion in sales, people familiar with the matter said.
The two firms have held preliminary talks about the feasibility of a combination, the people said, asking not to be identified because the matter is private. If discussions go smoothly, Brenntag and Univar may decide as soon as the next couple months whether to proceed with a transaction, the people said.
Brenntag has declined 14% this year, valuing the Essen-based firm at €10.6 billion ($11 billion). Downers Grove, Illinois-based Univar is up more than 9%, giving it a market capitalization of more than $5 billion.
Deliberations are at a preliminary stage and there’s no certainty they will lead to a transaction, the people said. Representatives for Brenntag and Univar couldn’t immediately comment.
The potential tie-up would rank as a top three transaction in the chemical industry this year and mark a late bright spot for big cross-border dealmaking. Global mergers and acquisitions are down almost 30% this year to $2.4 trillion, according to data compiled by Bloomberg, hurt by economic headwinds and difficult financing markets.
While Brenntag is a serial acquirer of smaller assets, a Univar takeover would mark its largest purchase by far and be a bold move for Chief Executive Officer Christian Kohlpaintner. The German company unveiled a new growth plan earlier this month to “shape the future of its industry” including organic re-investments and “value creating M&A activities.”
Univar is no stranger to dealmaking itself. It merged with rival Nexeo Solutions Inc. in 2018 and then sold its plastics business in 2019. David Jukes has served as Univar’s CEO since 2018.
A combination would create an opportunity to boost growth and cut costs, but could also face tough antitrust reviews as national governments more closely scrutinize sector tie-ups.
Brenntag reported $20.3 billion of sales over the trailing 12 months, compared with $11.4 billion at Univar, according to data compiled by Bloomberg. The German company is the global market leader in chemical and ingredients distribution with over 17,000 employees in 78 companies, according to its website.
Univar boasts one of the industry’s largest private transportation fleets as well as a sales force and logistics team that helps connect chemical makers and buyers across sectors.
–With assistance from Eyk Henning and Dinesh Nair.
©2022 Bloomberg L.P.
https://www.bnnbloomberg.ca/brenntag-is-said-to-explore-takeover-of-chemicals-rival-univar-1.1851291
Everchem Updates Archive 
Sign Up for Email Updates