Chemicals sector comment – March 2011

Dato

In the past month Clearwater’s chemicals team has completed two transactions. The first saw Tennants Consolidated Ltd acquire the esters and aroma chemicals production unit of Tessenderlo Group NV. We introduced the acquisition opportunity to Tennants as part of a competitive process run by the Belgian group. Tennants is a privately held chemical manufacturing and distribution group in the UK that is fulfilling its strategy of expanding its non-distribution activities into niche fine chemicals production.

The second transaction involves private equity investment in a UK producer of additive masterbatches for the plastics industry. Wells Plastics has seen Key Capital Partners provide expansion capital to the company through the acquisition of a significant minority stake in the company. Wells supplies additives to global plastic manufacturers and processors that are looking to modify the properties of plastic and polymer products in the agriculture, automotive, consumer products, construction and medical sectors. It has a particular specialism in anti-microbial, biodegradable and flame retardant additives including its innovative oxobiodegradable product, Reverte, which speeds up the natural degradation process of plastic. The investment will enable Wells to exploit the major growth opportunities in Africa, the Middle East and South America.

Deals

HallStar Co has acquired BioChemica International Inc, a US supplier of exotic butters and oils for personal care products. The acquisition will enhance HallStar’s portfolio of personal care ingredients with additional natural products.

Wanhua Industrial Ltd has acquired the remaining stake in Borsodchem hf, a Hungarian manufacturer of MDI, PVC and TDI resins. The transaction creates the world’s third largest producer of isocyanate and provides an exit for PE firms Permira and Vienna Capital Partners.

Chicago Bridge & Iron Co NV (CB&I) has acquired Chemical Research and Licencing Company Inc, a US developer of catalytic distillation technologies. The business was acquired from CRI/Criterion Inc, a subsidiary of Royal Dutch Shell plc, and provides CB&I’s Lummus Technology division with a 100% interest in Catalytic Distillation Technologies Inc.

Georgia Gulf Corp has acquired Exterior Portfolio LLC from Crane Group Ltd for $72m. Georgia Gulf is a US manufacturer of aromatic and chlorovinyls that will integrate the acquisition into its Building Products division to create the third-largest vinyl siding manufacturer in North America.

Resin Products & Technology BV has acquired the Yparex adhesives unit of DSM NV. Yparex is a producer of extrudable adhesive tie-layer resins used in industrial applications such as cables, cladding, films, HVAC equipment, pipe coatings, pipework and plumbing equipment.

Louis Dreyfus Commodities has acquired SCPA Sivex International SA from Entreprise Miniere et Chimique SA. SCPA Sivex is engaged in the processing, distribution and trading of fertilisers, pesticides and speciality chemicals.

MaxamCorp Holding SL has acquired the concentrated nitric acid facility in Tarragona, Spain from Ercros SA. MaxamCorp is an investment of Spanish private equity firm Inversiones Ibersuizas.

Techsil Ltd has acquired Fospat Industrial Ltd, a UK distributor of hot melt adhesives. Fospat’s product range includes coloured and glitter hot melts, foundry thermoplastic adhesives, hot melt glue sticks, pressure sensitive adhesives and UV adhesives.

Ecogreen Ltd has acquired Ifrachimie SA, a French manufacturer of personal care chemicals. Ifrachimie specialises in anionics, esters and ethoxylates for hair care products, shampoos and soaps.

PetroChina International Co Ltd has acquired a 50% stake in the European refining unit of Ineos AG. The $1bn investment by PetroChina involves the Ineos refineries at Grangemouth in the UK and Lavéra in France and is consistent with the Chinese group’s strategy of building a broader refining platform in Europe.

Valspar Corp has acquired Isocoat Tintas e Vernizes Ltda, a Brazilian manufacturer of powder paint coatings. Isocoat specialises in powder coatings used in appliance, building products, transportation and other general industrial markets.

Koch Industries Inc has acquired J&H Bunn Ltd, a UK distributor of fertilisers and other agrichemical products. The acquisition will enhance Koch’s presence in the UK agricultural market where it plans to significantly expand J&H Bunn’s operations which include Agri-tek Sales & Service, B&G Spreaders, Contract Fertiliser, Fertiliser & Storage, Payne Brothers, Spandler Brothers and WJ Reid Fertilisers

Begreen SA has acquired La Seda de Barcelona SA’s 20% stake in in Evertis Ltda, a Brazilian manufacturer of PET films. The acquisition allows Begreen to re-take full control of Evertis following La Seda’s acquisition of the stake in 2007 and subsequent restructuring. Evertis specialises in rigid and semi-rigid PET mono and multilayer films used in the food industry.

Meffert Group AG has acquired the architectural coatings unit of Schekolin AG, a subsidiary of Looser Group AG. The Switzerland-based architectural coatings division of Schekolin is a manufacturer of façade, floor and wall coatings which will be integrated into Meffert’s Maeder Farben subsidiary.

Solvay SA has acquired N&N Group SA’s fluorspar mine in Chiprovtsi, Bulgaria. This strategic acquisition reinforces the vertical integration of Solvay’s high added-value fluorinated specialty polymers and fluorinated special chemicals production.

Lubrizol Corp has acquired the Performance Products division of Nalco Holding Co. The acquisition includes Nalco’s Fixomer conditioning polymers, naturally-derived conditioning polymers, preservatives, styling polymers and UV absorbers for cosmetic and consumer product applications including hair, home and skin care products consumers use on a daily basis. These products will complement the portfolio of products within Lubrizol’s Noveon Consumer Specialties division which includes emollient esters, fixative polymers, rheology modifiers, sensory modifiers, speciality surfactants and thickeners.

RPM International Inc has acquired PSI Packaging Inc, a US manufacturer of synthetic fibres. RPM has completed the acquisition through its subsidiary Euclid Chemical Co which will add PSI Packaging’s specialist macro and micro fibres for the pre-cast and ready-mixed concrete market to its portfolio of products for the construction industry.

Dynea Oy has acquired Rom Re Ro Munteanu Srl, a Romanian adhesives manufacturer. Rom Re Ro specialises in phenolic and urea resins for the wood-working industry and will offer Dynea access to the Croatian, Polish and Serbian markets.

Azelis SA has acquired S&D Group Ltd, a UK distributor of ingredients and raw materials for the food and beverage, personal care, pharmaceutical and performance chemicals industries. The acquisition will significantly strengthen the Azelis Life Science division with a leading position in the European personal care and pharmaceutical sectors.

Buckingham Capital and Stelaris Capital have acquired SRC Inc from Monomoy Capital Partners. SRC Inc is a US manufacturer of magnesium flux.

Behn Meyer Chemical Holding AG has acquired Flexsys SpA from Solutia Inc for $26m. Flexsys is an Italian manufacturer of rubber processing chemicals including accelerators, anti-degradants, anti-reversion agents, stabilisers and vulcanizing agents.

Clariant AG has acquired Sued-Chemie AG, a German producer of absorbents, catalysts and water treatment chemicals. The $1.9bn acquisition will reinforce Clariant’s move into the biotechnology, lithium-ion batteries and specialist materials markets, whilst also offering less cyclicality to its operations.

Tennants Consolidated Ltd has acquired Tessenderlo Fine Chemicals Ltd from Tessenderlo Group NV. The acquisition is part of Tennants Group’s strategy of expanding its production activities in niche markets. Read more here.

Indorama Ventures Ltd has acquired a 75% stake in Trevira GmbH, a German manufacturer of polyester films for automotive and home textile applications. The remaining 25% will be held by Sinterama SpA, an Italian manufacturer of polyester filament specialities.