The past month has been marked by a number of transactions which will contribute to the reshaping of French speciality chemical manufacturer Arkema.
The group has spent $350m on the acquisition of two Chinese companies engaged in the production of bio-based nylon in order to strengthen its position in bio-sourced polyamides. Hipro Polymers is a manufacturer of bio-nylon 10.10, whilst Casda Biomaterials is a manufacturer of castor oil-derived sebacic acid, a key feedstock of the Hipro’s materials. Hipro’s polyamide 10.10 will complement Arkema’s added-value polyamide 11 and 12 product range and mean that the group will be the only global producer of long-chain polyamide 10, 11 and 12. As a result of these acquisitions the group is cementing its position in the bio-sourced polyamide market, which is growing at between 15% and 20% per annum. At the same time Casda Biomaterials will also allow the group to expand into the markets for corrosion-inhibiting additives, lubricants and plasticizers, as well as the fast-growing bio-sourced and biodegradable co-polymer market. The two Chinese companies, with combined revenues of $230m, were predominantly-owned by a joint venture between Feixiang Chemicals Co Ltd and US private equity firm Bain Capital.
Arkema’s strategy is to target an additional €1bn ($1.3bn) of revenues through acquisitions. With this in mind, earlier in the year the group acquired the coatings resins and photocure businesses of Total for $730m. Another of its recent acquisitions involves the speciality alcoxylates business of SEPPIC, a subsidiary of the Air Liquide. SEPPIC’s alcoxylates are alcoxylated surfactants and speciality polyols for the adhesives, coatings, paints and resins markets. Alcoxylates are a key component in the production of rheological formulations used in coatings, as well as high performance concrete additives used in complex civil engineering and construction applications including asphalt mix for road construction. The transaction includes SEPPIC’s production facility in Antwerp, Belgium which will be integrated into Arkema’s Performance Products division.
Meanwhile, the refocusing of the group’s activities away from commodity chemicals towards more speciality products has seen it commence the spin-off and disposal of its Vinyl Products division. The group’s chlorochemicals, PVC and related downstream activities are to be divested to Swiss private equity firm Kletch Group, a specialist investor in commodity-related industrial operations. The new entity, with revenues in excess of €1bn, will be a significant player in the European PVC market with a combination of upstream activities in chlorine, caustic soda and PVC, as well as downstream activities including compounds, pipes and profiles. It will have a new focused growth strategy and will be launched with significant financial resources provided by Arkema in order to boost its long-term development.
Praxair Inc has acquired American Gas Group Inc (AGG), a US supplier of speciality industrial gases worldwide. AGG product range includes EPA protocols, high-purity chemicals, hydrocarbons, medical gases, reactive mixtures, research-grade gases and VOC mixtures.
Swiss private equity firm Kletch Group has acquired the Vinyl Products division of Arkema SA. The unit specialises in chlorochemicals, PVC and related downstream activities. Kletch Group specialises in the acquisition of commodity-related industrial businesses.
Berlac Group AG has acquired Cetelon Group GmbH, a German manufacturer of nano-based coating systems. Cetelon focuses in particular on decorative paints and functional speciality coatings for niche applications in the automotive, construction, mechanical engineering and railway industries. The transaction provides an exit for German private equity firm Steadfast Capital.
Lubrizol Corp has acquired Chemtool Inc, a US manufacturer of custom formulated greases for the lubricants industry. This acquisition will expand the group’s Lubrizol Additives Custom Solutions division by allowing it to offer products that improve performance, extend service life, support process improvements and reduce the overall cost of running of facilities. The US group has also acquired Merquinsa SA, a Spanish manufacturer of speciality thermoplastic polyurethanes in order to expand its Engineered Polymers division.
Arkema SA has acquired Hipro Polymers Ltd, a Chinese manufacturer of bio-sourced nylon 10.10. The French group has also acquired Casda Biomaterials Ltd, a Chinese manufacturer of sebacic acid derived from castor oil, a building block for Hipro’s materials. The $365m acquisitions will strengthen Arkema’s position in the market for bio-sourced polyamides. The transactions provide an exit for US private equity firm Bain Capital. Arkema has also acquired the speciailty alcoxylates business of SEPPIC SA, a subsidiary of French industrial gas group Air Liquide SA. The acquisition would expand Arkema’s range of speciality surfactants for niche applications in the construction and oil and gas markets in particular.
Solvay SA has acquired the 50% stake in Orbeo SA held by French bank Société Générale. As result the Belgian group has taken full control of the French developer of greenhouse gas emission abatement solutions. The acquisition will be integrated into the group’s Rhodia Energy subsidiary.
Brenntag AG has acquired Motor Polimer Spzoo, a Polish chemicals and polymers distributor. The acquisition will be integrated into the German group’s European Polymers and Chemicals Distribution division. The transaction provides an exit for Polish private equity firm Carlson Capital Partners.
PTT Global Chemical plc has acquired a 51% stake in the Isocyanate division of Perstorp AB. The $150m investment will focus on the turnaround of the Swedish group’s hexamethylene diisocyanate (HDI) and toluene diisocyanate (TDI) businesses. Perstorp is backed by French private equity firm PAI Partners.
Kiri Industries Ltd has acquired SMS Chemical Co, a Taiwanese distributor of commodity and speciality chemicals. The acquisition is part of the Indian group’s forward integration strategy into the South East Asian market.
Solutia Inc has acquired Southwall Technologies Inc, a US developer and manufacturer of energy saving film and glass products for automotive and construction applications. The acquisition will be integrated into the US group’s Performance Films division.
Eastman Chemical Co has acquired TetraVitae Bioscience Inc, a US developer of renewable chemicals. TetraVitae Bioscience specialises in bio-based acetone and butanol and will be integrated into the US group’s Eastman Renewable Materials subsidiary as part of its strategy of expanding its range of sustainable chemical products.
Lanxess AG has acquired Verichem Inc, a US manufacturer of biocides used in adhesives, construction materials, protectective coatings and pulp and paper. The acquisition will be integrated into the German group’s Material Protection Products division where it will enhance its position in the US materials protection market and broaden its global biocide manufacturing operations following its recent acquisition of the material protection business of Syngenta AG.
Crest Chemicals Ltd has acquired WK Croxton Pty Ltd, a South African distributor of caustic soda, magnesium oxide, sodium chlorate and sodium hypochlorite. In addition, Crest Chemicals has acquired a 64% stake in Protank Pty Ltd, a South African provider of bulk liquid handling and storage services. The acquisitions will strengthen Crest Chemicals’ presence in the South African chemicals distribution market. The company is a joint-venture between AECI Ltd and Brenntag AG.