Industry Insights: Q4 2019 Chemicals
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Industry Insights: Q4 2019 Chemicals Contents Industry Overview………...…….….………….. Transaction Activity………………………….. Transaction Multiples…....…...….….………Public Company Comparable Analysis…Active Buyers…...…………………….……Precedent Transactions Analysis…….……Industry Overview Number of Closed Transactions 1,2 Although buyers express caution amid the challenging macroeconomic outlook, there is limited evidence of a decline in transaction activity in 2020 as chemical companies continue to restructure. During the fourth quarter of 2019, there were 55 M&A transactions within the chemicals industry that closed. Commodity chemicals led in terms of transaction volume (33), transacting at an average EV/EBITDA multiple of 11.5x. Looking at the LTM performance of the chemicals industry relative to the S&P 500, specialty chemicals returned 15.1%, outperformed by the S&P 500 which returned 28.5%. U.S. and European chemical equity prices took a hit through much of 2019 before rallying at the end of the year. The number of closed transactions has increased quarter-over-quarter (QOQ) since the second quarter of 2019, with the average EV/EBITDA transaction multiple increasing by 8% over the same period. Although the number of closed transactions decreased in 2019 (188) by 27%, in comparison to 2018 (258), there has been an uptick in corporate restructuring involving carve-outs, which is set to drive chemical M&A activity in 2020. The expansion of chemical production volume due to the commissioning of new capacity and lower plant utilization (<85%) has led to oversupply and margin pressures. Companies are actively looking for acquisitions to shift their portfolio into higher-margin specialties and create more integrated value chains, increasing competition for higher quality performance chemicals businesses and transaction multiples. Furthermore, despite recent positive gains experienced in construction-related resins and pigments, U.S. housing starts and auto production show signs of weakening growth causing some companies to seek entrance into new markets by acquiring innovative and enabling technologies. The market witnessed two multi-billion-dollar transactions in the fourth quarter of 2019 – the acquisition of LORD Corporation by Parker-Hannifin Corporation (NYSE:PH) for $3.6 billion and the acquisition of Zhejiang Huafon New Materials Co., Ltd. by Zhejiang Huafeng Spandex Co., Ltd (SZSE:002064) for $2.2 billion. Additionally, a few notable transactions were announced that are intended to close by this time next year: the acquisition of the Nutrition & Biosciences business of DuPont de Nemours, Inc. (NYSE:DD) by International Flavors & Fragrances Inc. (NYSE:IFF) for $26.2 billion; the acquisition of Hitachi Chemical Company, Ltd. (TSE:4217) by Showa Denko K.K. (TSE:4004) for $9.8 billion; the acquisition of Innophos Holdings, Inc. (NasdaqGS:IPHS) by Iris Parent LLC for $1.0 billion; and the acquisition of Icynene-Lapolla by Huntsman Corporation (NYSE:HUN) for $350 million. The consensus is that 2020 will be another year of slow growth. In response, chemical companies are restructuring their portfolios towards higher-margin value-added specialties and carving-out non-core assets in order to remain competitive, creating an opportunity for both strategic and financial buyers. Private equity firms are sitting on $2.4 trillion of dry powder to be deployed and are setting the pace, but there is still a cohort of strategic buyers looking for acquisitions to increase margins and market share. Higher multiples have not discouraged financial buyers from increasing their share of chemicals M&A, with average deal value more than doubling since early 2000. There has already been a wave of corporate carve-out divestitures announced or completed in 2019, with the trend set to continue into 2020. Although the U.S. and the global economy should see slow growth in 2020, M&A activity is projected to remain robust as the profits of performance outperform and acquisitions become increasingly attractive. Total Transaction Value ($bn) 1 Transaction EV/EBITDA Multiples 1 1 4 5 6 7 8 1 Source(s): S&P Capital IQ, Pitchbook, ICIS, ACC, ACS, Trading Economics, FactSet 2 Number of closed transactions only include transactions with disclosed transaction values. Quarterly Performance 67 44 41 48 55 51 0 20 40 60 80 18Q4 19Q1 19Q2 19Q3 19Q4 Average $32.5 $21.6 $8.6 $13.5 $10.7 $17.4 $0 $5 $10 $15 $20 $25 $30 $35 18Q4 19Q1 19Q2 19Q3 19Q4 Average 12.2x 10.7x 9.2x 9.1x 9.9x 10.2x 0.0x 3.0x 6.0x 9.0x 12.0x 15.0x 18Q4 19Q1 19Q2 19Q3 19Q4 Average
Transcript of Industry Insights: Q4 2019 Chemicals
Industry Insights: Q4 2019 Chemicals
Contents Industry Overview………...…….….………….. Transaction Activity………………………….. Transaction Multiples…....…...….….……….... Public Company Comparable Analysis…....... Active Buyers…...…………………….……...... Precedent Transactions Analysis…….……....
Industry Overview
Number of Closed Transactions1,2
Although buyers express caution amid the challenging macroeconomic outlook, there is limited evidence of a decline in transaction activity in 2020 as chemical companies continue to restructure. During the fourth quarter of 2019, there were 55 M&A transactions within the chemicals industry that closed. Commodity chemicals led in terms of transaction volume (33), transacting at an average EV/EBITDA multiple of 11.5x. Looking at the LTM performance of the chemicals industry relative to the S&P 500, specialty chemicals returned 15.1%, outperformed by the S&P 500 which returned 28.5%. U.S. and European chemical equity prices took a hit through much of 2019 before rallying at the end of the year. The number of closed transactions has increased quarter-over-quarter (QOQ) since the second quarter of 2019, with the average EV/EBITDA transaction multiple increasing by 8% over the same period. Although the number of closed transactions decreased in 2019 (188) by 27%, in comparison to 2018 (258), there has been an uptick in corporate restructuring involving carve-outs, which is set to drive chemical M&A activity in 2020. The expansion of chemical production volume due to the commissioning of new capacity and lower plant utilization (<85%) has led to oversupply and margin pressures. Companies are actively looking for acquisitions to shift their portfolio into higher-margin specialties and create more integrated value chains, increasing competition for higher quality performance chemicals businesses and transaction multiples. Furthermore, despite recent positive gains experienced in construction-related resins and pigments, U.S. housing starts and auto production show signs of weakening growth causing some companies to seek entrance into new markets by acquiring innovative and enabling technologies.
The market witnessed two multi-billion-dollar transactions in the fourth quarter of 2019 – the acquisition of LORD Corporation by Parker-Hannifin Corporation (NYSE:PH) for $3.6 billion and the acquisition of Zhejiang Huafon New Materials Co., Ltd. by Zhejiang Huafeng Spandex Co., Ltd (SZSE:002064) for $2.2 billion. Additionally, a few notable transactions were announced that are intended to close by this time next year: the acquisition of the Nutrition & Biosciences business of DuPont de Nemours, Inc. (NYSE:DD) by International Flavors & Fragrances Inc. (NYSE:IFF) for $26.2 billion; the acquisition of Hitachi Chemical Company, Ltd. (TSE:4217) by Showa Denko K.K. (TSE:4004) for $9.8 billion; the acquisition of Innophos Holdings, Inc. (NasdaqGS:IPHS) by Iris Parent LLC for $1.0 billion; and the acquisition of Icynene-Lapolla by Huntsman Corporation (NYSE:HUN) for $350 million. The consensus is that 2020 will be another year of slow growth. In response, chemical companies are restructuring their portfolios towards higher-margin value-added specialties and carving-out non-core assets in order to remain competitive, creating an opportunity for both strategic and financial buyers. Private equity firms are sitting on $2.4 trillion of dry powder to be deployed and are setting the pace, but there is still a cohort of strategic buyers looking for acquisitions to increase margins and market share. Higher multiples have not discouraged financial buyers from increasing their share of chemicals M&A, with average deal value more than doubling since early 2000. There has already been a wave of corporate carve-out divestitures announced or completed in 2019, with the trend set to continue into 2020. Although the U.S. and the global economy should see slow growth in 2020, M&A activity is projected to remain robust as the profits of performance outperform and acquisitions become increasingly attractive.
Total Transaction Value ($bn)1 Transaction EV/EBITDA Multiples1
1 4 5 6 7 8
1 Source(s): S&P Capital IQ, Pitchbook, ICIS, ACC, ACS, Trading Economics, FactSet 2 Number of closed transactions only include transactions with disclosed transaction values.
Quarterly Performance
67
44 4148
55 51
0
20
40
60
80
18Q4 19Q1 19Q2 19Q3 19Q4 Average
$32.5
$21.6
$8.6$13.5
$10.7
$17.4
$0$5
$10$15$20$25$30$35
18Q4 19Q1 19Q2 19Q3 19Q4 Average
12.2x10.7x
9.2x 9.1x 9.9x 10.2x
0.0x
3.0x
6.0x
9.0x
12.0x
15.0x
18Q4 19Q1 19Q2 19Q3 19Q4 Average
2
Industry Performance
Stock Price Performance LTM Relative Stock Price Performance1
PEG Ratio LTM PEG Ratio1,3
1 Source(s): S&P Capital IQ, Pitchbook 3 PEG = industry P/E ratio divided by the industry LT Growth (%) estimate.
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
LT Growth (%) Estimates Adjusted for Corteva, Inc.
(NYSE:CTVA).
LT Growth (%) Estimates Adjusted for Dow Inc.
(NYSE:DOW).
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EV/EBITDA
LTM EV/EBITDA Multiples1
Industry Multiples
EV/Revenue LTM EV/Revenue Multiples1
1 Source(s): S&P Capital IQ, Pitchbook
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
DuPont de Nemours, Inc.(NYSE:DD) added to S&P 500 Specialty Chemicals Index.
DuPont de Nemours, Inc.(NYSE:DD) added to S&P 500 Specialty Chemicals Index.
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Transaction Volume
Number of Closed Transactions1,2
Transaction Activity
1 Source(s): S&P Capital IQ, Pitchbook 2 Number of closed transactions only include transactions with disclosed transaction values.
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
Transaction Activity by Geographic Region Number of Closed Transactions by Geographic Region1
Bayer AG (DB:BAYN) completed the acquisition of
Monsanto Company (NYSE:MON).
The Dow Chemical Company (NYSE:DOW)
completed the acquisition of E.I. du Pont de Nemours and Company (NYSE:DD).
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Transaction Multiples
Transaction EV/EBITDA Multiples Transaction EV/EBITDA Multiples1
1 Source(s): S&P Capital IQ, Pitchbook
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
Transaction EV/Revenue Multiples Transaction EV/Revenue Multiples1
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Agricultural Chemicals Public Company Comparable Analysis – Agricultural Chemicals ($mm)1
Public Company Comparable Analysis
Chemical Distribution Public Company Comparable Analysis – Chemical Distribution ($mm)1
Commodity Chemicals Public Company Comparable Analysis – Commodity Chemicals ($mm)1
Diversified Chemicals Public Company Comparable Analysis – Diversified Chemicals ($mm)1
Specialty Chemicals Public Company Comparable Analysis – Specialty Chemicals ($mm)1
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
1 Source(s): S&P Capital IQ, Pitchbook 4 Market Capitalization as of 12/31/19 5 Adj. mean excludes high and low values.
CompanyMarket
Capitalization4Enterprise
Value LTM REVENUE LTM EBITDA NTM EBITDA LTMEV/EBITDA
NTMEV/EBITDA
American Vanguard Corporation (NYSE:AVD) $588 $759 $469 $54 $63 14.0x 12.0xCF Industries Holdings, Inc. (NYSE:CF) 10,380 17,033 4,673 1,837 1,674 9.3x 10.2xCorteva, Inc. (NYSE:CTVA) 22,123 24,548 13,678 1,054 2,174 23.3x 11.3xFMC Corporation (NYSE:FMC) 12,938 16,333 4,954 1,352 1,287 12.1x 12.7xSociedad Química y Minera de Chile S.A. (NYSE:SQM) 7,025 7,740 2,037 716 762 10.8x 10.2xThe Mosaic Company (NYSE:MOS) 8,196 12,645 9,351 1,750 1,529 7.2x 8.3xSummary Statistics
Mean $10,208 $13,176 $5,860 $1,127 $1,248 12.8x 10.8xAdj. Mean5 9,635 13,438 5,254 1,218 1,313 11.5x 10.9x
Median 9,288 14,489 4,814 1,203 1,408 11.4x 10.7x
CompanyMarket
Capitalization4Enterprise
Value LTM REVENUE LTM EBITDA NTM EBITDA LTMEV/EBITDA
NTMEV/EBITDA
Brenntag AG (XTRA:BNR) $8,369 $10,856 $14,334 $980 $1,157 11.1x 9.4xIMCD N.V. (ENXTAM:IMCD) 4,559 5,323 2,946 250 289 21.3x 18.4xITOCHU Corporation (TSE:8001) 34,990 73,912 107,729 6,464 7,088 11.4x 10.4xMitsubishi Corporation (TSE:8058) 40,572 96,814 147,147 6,678 7,992 14.5x 12.1xSumitomo Corporation (TSE:8053) 18,794 48,132 50,912 3,588 4,025 13.4x 12.0xUnivar Solutions Inc. (NYSE:UNVR) 4,087 7,148 9,103 633 749 11.3x 9.5xSummary Statistics
Mean $18,562 $40,364 $55,362 $3,099 $3,550 13.8x 12.0xAdj. Mean5 16,678 35,012 45,520 2,916 3,255 12.7x 11.0x
Median 13,581 29,494 32,623 2,284 2,591 12.4x 11.2x
CompanyMarket
Capitalization4Enterprise
Value LTM REVENUE LTM EBITDA NTM EBITDA LTMEV/EBITDA
NTMEV/EBITDA
Braskem S.A. (BOVESPA:BRKM5) $6,070 $14,662 $13,497 $1,464 $1,931 10.0x 7.6xDow Inc. (NYSE:DOW) 40,582 58,909 44,691 6,705 7,503 8.8x 7.9xLyondellBasell Industries N.V. (NYSE:LYB) 31,501 45,029 35,424 5,542 6,165 8.1x 7.3xOrbia Advance Corporation, S.A.B. de C.V. (BMV:ORBIA *) 4,385 9,207 7,041 1,296 1,345 7.1x 6.8xOlin Corporation (NYSE:OLN) 2,754 6,236 6,358 1,003 841 6.2x 7.4xWestlake Chemical Corporation (NYSE:WLK) 9,003 11,967 8,230 1,462 1,605 8.2x 7.5xSummary Statistics
Mean $15,716 $24,335 $19,207 $2,912 $3,232 8.1x 7.4xAdj. Mean5 12,740 20,216 16,048 2,441 2,762 8.0x 7.4x
Median 7,537 13,314 10,864 1,463 1,768 8.2x 7.4x
CompanyMarket
Capitalization4Enterprise
Value LTM REVENUE LTM EBITDA NTM EBITDA LTMEV/EBITDA
NTMEV/EBITDA
Arkema S.A. (ENXTPA:AKE) $8,033 $10,072 $9,935 $1,616 $1,653 6.2x 6.1xBASF SE (XTRA:BAS) 69,117 90,001 69,444 7,660 10,199 11.7x 8.8xEastman Chemical Company (NYSE:EMN) 10,778 17,054 9,444 1,899 2,052 9.0x 8.3xHuntsman Corporation (NYSE:HUN) 5,447 7,908 8,736 1,048 856 7.5x 9.2xSolvay SA (ENXTBR:SOLB) 11,906 16,284 12,678 2,313 2,600 7.0x 6.3xThe Chemours Company (NYSE:CC) 2,958 6,753 5,637 916 1,091 7.4x 6.2xSummary Statistics
Mean $18,040 $24,678 $19,312 $2,575 $3,075 8.2x 7.5xAdj. Mean5 9,041 12,829 10,198 1,719 1,849 7.7x 7.4x
Median 9,405 13,178 9,690 1,757 1,852 7.5x 7.3x
CompanyMarket
Capitalization4Enterprise
Value LTM REVENUE LTM EBITDA NTM EBITDA LTMEV/EBITDA
NTMEV/EBITDA
Akzo Nobel N.V. (ENXTAM:AKZA) $20,214 $21,459 $10,438 $1,113 $1,682 19.3x 12.8xClariant AG (SWX:CLN) 7,335 9,325 6,826 823 764 11.3x 12.2xDuPont de Nemours, Inc. (NYSE:DD) 47,560 64,199 85,148 16,121 5,879 4.0x 10.9xFerro Corporation (NYSE:FOE) 1,216 2,060 1,543 169 247 12.2x 8.3xH.B. Fuller Company (NYSE:FUL) 2,629 4,632 2,926 406 462 11.4x 10.0xRPM International Inc. (NYSE:RPM) 9,954 12,602 5,577 687 868 18.3x 14.5xSummary Statistics
Mean $14,818 $19,046 $18,743 $3,220 $1,650 12.8x 11.5xAdj. Mean5 10,033 12,005 6,442 757 944 13.3x 11.5x
Median 8,644 10,964 6,202 755 816 11.8x 11.6x
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Active Industry Buyers Strategic Buyers
Active Strategic Buyers – Chemicals1
Financial Buyers Active Financial Buyers – Chemicals1
1 Source(s): S&P Capital IQ, Pitchbook
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
Acquiring Company Announced Closed TargetDec-19 Dec-19 Shandong Luxin Mount Tai Co.Nov-17 Nov-17 Micron-Ita Indústria e Comércio de Minerais Ltda.Dec-19 Dec-19 Corteva (Select Herbicide Brands)Jan-19 Jan-19 DowDuPont Inc. (Quizalofop Product Line)Dec-19 Dec-19 Tan International LtdSep-18 Jul-19 Desbro Kenya LimitedMay-19 May-19 Marlin Company, Inc.Mar-19 Mar-19 New England Resins & Pigments CorporationDec-18 Dec-18 Pachem Distribution IncAug-18 Aug-18 ALPHAMIN S.A.Sep-19 Nov-19 Capital Paints LLCJun-17 Dec-17 CH Coatings AGAug-17 Aug-17 Plascoat Systems LimitedMay-17 Jun-17 Spencer Coatings LimitedOct-18 Oct-19 DYM Solution Co. Ltd.Jul-18 Aug-18 Ecoplast Kunststoffrecycling GmbHDec-18 Oct-19 Saudi Methanol CompanyJan-19 Jan-19 Black Diamond StructuresSep-19 Oct-19 Crevo-HengxinMar-19 Jul-19 Belineco LLCJul-18 Sep-18 Polypag AGDec-17 Dec-17 EMSEAL Joint Systems, LTD.Feb-19 Oct-19 BevPak Nigeria LimitedDec-18 Mar-19 INVISTA (PET Business)Jun-18 Jun-18 ARTLANT PTA, SA.Nov-17 Nov-17 CEPSA Química, S.A. (Guadarranque Facility)Aug-19 Oct-19 CEPSA Química MontréalApr-17 Aug-19 Houghton InternationalJul-19 Oct-19 Lambson Limited
May-19 Jul-19 ArrMaz Custom ChemicalsArkema S.A.
Indorama Netherlands B.V.
Borealis AG
Axalta Coating Systems
Saudi Basic Industries Corporation
Sika AG
Quaker Chemical Corporation
Imerys S.A.
American Vanguard Corporation
Brenntag AG
Acquiring Company Announced Closed TargetNov-19 Dec-19 Heidelberger Druckmaschinen Aktiengesellschaft (Hi-Tech Coatings Division)Sep-19 Sep-19 IdeaPaintFeb-19 Feb-19 TPR2 (Fireshell, Heat Shedder, FireSafe and Structure Saver Brands)Jan-16 Feb-16 3M (Pressurized Polyurethane Foam Adhesives Business)Nov-19 Nov-19 Polymer Solutions Group (Polymer Additives Division)Sep-17 Oct-17 Vantage Specialty ChemicalsMar-17 Mar-17 DuBois ChemicalsDec-16 Jan-17 OMG Borchers GmbHJun-19 Nov-19 Covestro AG (European Polyurethane Systems Business)Sep-18 Sep-18 RecochemAug-19 Oct-19 GEON Performance SolutionsDec-17 Mar-18 Perimeter SolutionsJun-17 Jun-17 Foremark Performance ChemicalsJun-17 Jun-17 Tri-Tex co inc.Oct-19 Oct-19 Deltech Resin (Select Portfolio of Alkyd Resins)Nov-17 Nov-17 Ranbar Electrical MaterialsDec-15 Dec-15 InChem Corporation (Phenoxy Resins Business)Dec-15 Dec-15 BASF Corporation (Versamid Product Line)Jul-19 Jul-19 Seal for Life Industries, LLCOct-18 Oct-18 Polytek Development Corp.Oct-17 Oct-17 Carolina Color CorporationOct-17 Oct-17 East Coast ColorantsAug-19 Aug-19 Epoxies, Etc.Jul-19 Jul-19 PolyCom Industries / Eco DispersionsSep-18 Sep-18 W.F. Taylor, LLCSep-18 May-18 Evans Adhesive Corporation, Ltd.
Meridian Adhesives Group(Arsenal Capital Partners)
Gabriel Performance Products(Audax Management Company)
The Jordan Company
H.I.G. Capital
SK Capital Partners
Innovative Chemical Products Group(Audax Management Company)
Arsenal Capital Partners
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Transaction Activity Recently Closed Chemical Transactions1
Precedent Transactions Analysis
1 Source(s): S&P Capital IQ, Pitchbook
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
Date Closed Target Target Description Acquiring Company Transaction
ValueLTM
EV/RevenueLTM
EV/EBITDA
AnnouncedDuPont de Nemours, Inc.(Nutrition & Biosciences Business)
The Business offers healthy and sustainable solutions.
International Flavors & Fragrances Inc. $26,200 N/A N/A
Announced Hitachi Chemical Company, Ltd.
Manufactures and sells functional materials, and advanced components and systems.
Showa Denko K.K. 9,892 1.5x 12.7x
Announced Innophos Holdings, Inc. Produces specialty ingredients. Iris Parent LLC 1,034 1.3x 9.1x
Announced Icynene-Lapolla Manufactures and distributes spray polyurethane foam insulation products.
Huntsman Corporation 350 1.5x N/A
Announced Ellison Surface Technologies, Inc
Manufactures thermal spray coating and performance coating solutions.
Bodycote plc 200 4.0x N/A
Dec-19 Shandong Luxin Mount Tai Co., Ltd.
Manufactures and provides fused alumina. Imerys S.A. N/A N/A N/A
Dec-19 Corteva, Inc.(Select Herbicide Brands)
The select herbicide brands comprises Classic, First Rate, Hornet, and Python.
American Vanguard Corporation
N/A N/A N/A
Dec-19 Mergon International Ltd.Designs, manufactures, assembles, and sells plastic molding components, fixtures and molds.
Elysian Capital LLP N/A N/A N/A
Dec-19 Ja-Bar Silicone Corporation Manufactures silicone and other elastomeric materials.
Nolato AB 10 N/A N/A
Dec-19 Tan International Ltd Supplies chemicals. Brenntag AG N/A N/A N/A
Dec-19 Aerospheres UK Ltd. Supplies chemicals for aircraft maintenance. Aircraft Fasteners International, LLC
N/A N/A N/A
Dec-19 Inland Environmental Resources, Inc.
Distributes magnesium oxide and magnesium hydroxide products.
Calix Limited 6 N/A N/A
Dec-19Société Internationale de Plantations d'Hévéas Société Anonyme
Cultivates, harvests, processes, and markets natural rubber.
Compagnie Financière Michelin SCmA 656 1.9x 20.6x
Dec-19 Órgano Síntesis S.A. de C.V.
Manufactures fine chemicals for various applications.
Pilot Chemical Corp. N/A N/A N/A
Dec-19 Kester Inc. Manufactures and supplies assembly materials.
Alpha Assembly Solutions, Inc.
68 N/A N/A
Dec-19Freeport Cobalt Oy(Cobalt Refining & Cathode Precursor Business)
The Business comprises cobalt refinery and cathode precursor production activities. Umicore SA 200 N/A N/A
Dec-19
Heidelberger Druckmaschinen Aktiengesellschaft(Hi-Tech Coatings Division)
The Division comprises coating services. Innovative Chemical Products Group
43 N/A N/A
Dec-19 HeBei Jinniu Chemical Industry Co.,Ltd
Produces and sells methanol products. Jizhong Energy Fengfeng Group Co.,Ltd
59 3.7x N/A
Nov-19 United Oil Company Pte Ltd Manufactures and supplies lubricant products. Repsol Downstream Internacional S.A.
47 N/A N/A
Nov-19Polymer Solutions Group(Polymer Additives Division)
The division comprises homogenizing agents, process aids, dispersions and release agents. The Jordan Company, L.P. N/A N/A N/A
Nov-19 Capital Paints Manufactures industrial thermosetting powder coatings.
Axalta Coating Systems Ltd.
N/A N/A N/A
Nov-19 Unicell Poland sp. z o.o. Manufactures paints and coatings. Flügger group A/S 13 1.0x 7.3x
Nov-19 Shanghai Phichem MaterialDevelops, manufactures and sells specialty chemicals and materials.
Gongqingcheng Shengheng Investment Management Co., Ltd.
45 4.7x 20.8x
Nov-19 Unipar Indupa S.A.I.C. Produces and sells polyvinyl chloride (PVC) resins and sodium hydroxide.
Unipar Carbocloro S.A. 19 1.2x 29.6x
Nov-19 CirComp GmbHSpecializes in designing and manufacturing customized engineered composite components.
Albany International Corp. 43 N/A N/A
Nov-19 gabo Systemtechnik GmbH Develops, manufactures, and distributes plastic micro duct systems.
HellermannTyton Corporation
310 3.1x N/A
9
1 Source(s): S&P Capital IQ, Pitchbook 5 Adj. mean excludes high and low values.
Precedent Transactions Analysis Cont. Transaction Activity
Recently Closed Chemical Transactions1
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
Date Closed Target Target Description Acquiring Company Transaction
ValueLTM
EV/RevenueLTM
EV/EBITDA
Nov-19 Ergis S.A. Manufactures and sells plastic packing products.
Finergis Investments Limited
62 0.4x 6.6x
Nov-19 Zhejiang Huafon New Materials Co., Ltd.
Manufactures and sells polyurethane (PU) products in China.
Zhejiang Huafeng Spandex Co., Ltd.
2,271 1.4x N/A
Nov-19 LACC LLC Owns and operates ethane cracker plants to manufacture ethylene.
Eagle US 2 LLC 816 N/A N/A
Nov-19 Synnovia PLCManufactures and sells industrial components and consumables in the United Kingdom.
Camelot Capital Partners LLC 68 0.8x 10.1x
Nov-19
The Scotts Miracle-Gro Company(Industrial Weed Control Business)
The Business comprises weed control products manufacturing and selling operations.
Monsanto Company 35 N/A N/A
Nov-19Nan Pao Resins Chemical Co., Ltd.
Manufactures, wholesales, and retails plastic and synthetic resins, adhesives, resin coatings, dyes, and pigments.
Yue Dean Technology Corporation 50 1.1x 10.1x
Nov-19 Silclear Limited Designs, manufactures, and supplies silicone solutions.
Skellerup Holdings Limited 4 N/A N/A
Nov-19 Poly-Cast, Inc. Manufactures and supplies injection molded plastic parts.
Falcon Plastics, Inc. N/A N/A N/A
Nov-19 Willowood USA LLC Manufactures crop protection products. Generic Crop Science LLC 20 N/A N/A
Nov-19Covestro AG(European Polyurethane Systems Business)
The Business comprises development, production, and marketing operations of polymer materials.
H.I.G. Capital, LLC N/A N/A N/A
Oct-19 CHTC Helon Co., Ltd. Produces and sells viscose fiber products. Wenzhou Kangnan Technology Co., Ltd.
82 3.6x N/A
Oct-19 LORD Corporation Develops, manufactures, and markets adhesives and coatings.
Parker-Hannifin Corporation 3,675 3.6x 16.5x
Oct-19
GEON Performance Solutions(Performance Products & Solutions Business)
The Business comprises plastics products business for vinyl molding and extrusion processors.
SK Capital Partners 775 1.1x N/A
Oct-19 Deltech Resin Co.(Select Portfolio of Resins)
The portfolio omprises a select portfolio of alkyd resins.
Gabriel Performance Products, LLC
N/A N/A N/A
Oct-19 Saudi Methanol Company Manufacture chemical grade methanol. Saudi Basic Industries Corporation
150 N/A N/A
Oct-19 Spartech LLCManufactures engineered polymer structures, rigid barrier packaging, and specialty cast acrylics.
Nautic Partners, LLC N/A N/A N/A
Oct-19 Keystone Epoxy Systems LLC
Manufactures and supplies concrete grouting repair and epoxy flooring coatings.
Northeast Foundation & Concrete Inc.
N/A N/A N/A
Oct-19Shandong Yanggu Huatai Chemical Co., Ltd. Produces rubber chemicals in China.
Shenzhen Lingnan Capital Investment Management Co., Ltd.
22 1.4x 7.8x
Oct-19
Novartis Pharma Schweizerhalle AG(Chemical Production Facility)
The chemical production facility comprises agrochemical production operations.
Syngenta Crop Protection AG
N/A N/A N/A
Oct-19The Dow Chemical Company(Latex Binders Assets)
Assets comprises latex binders in Germany. Trinseo S.A. 45 N/A N/A
Oct-19 Lambson LimitedDevelops, manufactures, markets, and sells specialty chemicals and other raw material solutions.
Arkema S.A. 67 N/A N/A
Oct-19 Norman Hay plc(Operating Divisions)
The Operating Divisions comprise specialty chemicals manufacturing business.
Quaker Chemical Corporation
98 N/A N/A
Mean $1,395 2.1x 13.7xAdj. Mean5 663 2.0x 12.8x
Median 67 1.5x 10.1x
Summary Statistics
10
Recent Transactions: Chemicals
Balmoral specializes in helping clients sell their businesses, source and complete acquisitions, and raise or refinance capital. We work with business owners, corporations and financial investors worldwide involving early-stage growth companies, successful mature businesses, corporate divestitures, special situations, and restructurings. Mergers & Acquisitions
♦ Buy- and sell-side advisory Capital Raising
♦ Growth and acquisition capital, leveraged buyouts, financial restructuring, late-stage venture capital and recapitalizations
Other Services ♦ Valuation analysis, consulting, financial modeling
and forecasting
Balmoral is an independent investment bank dedicated to providing mergers & acquisitions, corporate finance, and financial restructuring advisory services involving mid-sized transactions. We bring a powerful combination of deep experience, industry expertise, and broad market reach to every client engagement. Our senior professionals have decades of experience and collectively have advised on more than $35 billion of transactions. Unlike firms that have a more rigid transaction approach, we focus first and foremost on understanding our clients’ goals and developing tailored solutions to achieve exceptional outcomes on their behalf. Our practice is global, but the culture of our firm reflects our Midwestern roots in terms of values, work ethic, and focus on developing long-term relationships. Our clients value our advice and appreciate our results. Since inception, more than half of our completed transactions were with repeat clients.
Balmoral’s Senior Team
Chris Cerimele Managing Partner
+1 (312) 371-3527 (m) +1 (312) 766-9890 x237 (o) [email protected]
Bob Dekker Managing Director
+1 (312) 399-3627 (m) +1 (312) 766-9890 x335 (o) [email protected]
Stan Koss Managing Director
+1 (312) 953-3666 (m) +1 (312) 766-9098 x567 (o)
Karen Croyle Vice President
+1 (217) 621-3431 (m) +1 (312) 766-9890 x276 (o) [email protected]
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
About Balmoral Advisors
Balmoral’s Services
Primary Industries Served
Chemicals & Materials
Food & Beverage
Industrial & Manufacturing
Plastics & Packaging
Building Products
Acted as Financial Advisor to Particle Dynamics
Acted as Financial Advisor to Cathay Industries
Acted as Financial Advisor to Arsenal Capital Partners
Acted as Acted as Financial Advisor to PlastiComp
Has been acquired by Has sold its U.S. High Purity Division to
Michael Palumbo Analyst
+1 (574) 612-3251 (m) +1 (312) 766-9890 x725 (o)
Lillie Ross Analyst
+1 (630) 744-9833 (m) +1 (312) 766-9890 x767 (o)
Jonathan Goldstein Associate
+1 (847) 814-4110 (m) +1 (312) 766-9890 x465 (o) [email protected]
An Affiliated Portfolio Company of
Has been refinanced by
11
Balmoral Advisors | 100 S. Wacker, Suite 850, Chicago, IL 60606 | +1 (312) 766-9890 | www.balmoraladvisors.com *Securities offered through Bridge Capital Securities, Inc. Member FINRA/SIPC.
Completed Transactions Since 2015
Acted as Financial Advisor to Advanced Diamond Technologies Inc. Acted as Financial Advisor to Arsenal Capital Partners
Acted as Financial Advisor to Cathay Industries Acted as Financial Advisor to East West Copolymer Acted as Financial Advisor to East West Copolymer Acted as Financial Advisor to East West Copolymer
Acted as Financial Advisor to Melior Innovations
Acted as Financial Advisor to L Street Collaborative
Acted as Financial Advisor to Haverhill Chemicals
Acted as Financial Advisor to East West Copolymer
Acted as Financial Advisor to Axiall Corporation
Acted as Financial Advisor to Axiall Corporation
Has sold its U.S. High Purity Division to
Has been acquired by
Acted as Financial Advisor to NGC Acted as Financial Advisor to Oldcastle Infrastructure
Acted as Financial Advisor to P2 Science
Acted as Financial Advisor to Particle Dynamics
Acted as Financial Advisor to PlastiComp
Acted as Financial Advisor to SemiTorr Group, Inc.
Has sold its Industrial Division to
Has been acquired by
Stetco Hydraulic Crane
A division of
Has been acquired by
Has been acquired by
A subsidiary of
Has been acquired by
An affiliated portfolio company of
Acted as Financial Advisor to Transom Capital Group
Has received financing in relation to their acquisition of
An Affiliated Portfolio Company of
Has been refinanced by
Has Divested its Specialty Phosgene Derivatives Business to
Has Sold its Manufacturing Facilities in a Chapter 11 §363 Asset Sale to $16,000,000
Senior Secured Credit Facility Provided by Has Received a Growth Capital Investment
from
Has Received a Second Growth Capital Investment from
Has Sold its Manufacturing Facilities in a Chapter 11 §363 Asset Sale to
and
and Has Received an Investment from
Raised a Series B Financing Round Co-led by
