Chemicals sector comment – March 2012

Date

Lanxess has paid $10m for a minority stake in a US renewable raw materials company which exemplifies a growing trend in the chemicals industry.

The German group is building on it is 2011 acquisition of US phthalate-free plasticizers manufacturer Unitex Chemical Corp with its investment in BioAmber. With the global market for phthalate-free plasticisers worth nearly $2bn per annum, BioAmber is at cutting edge of developing sustainable alternatives to phthalate-containing formulations. The US company specialises in the development of succinic acid produced from renewable resources such as maize. Its fermentation process consumes considerably less energy than processes using fossil fuels, as well as being more cost-effective and having a better carbon footprint.

The transaction builds on the existing co-operation between BioAmber and Lanxess, with BioAmber’s first products likely to be fully commercialised later this year. BioAmber produces 3k tons per annum of bio-based succinic acid at its facility in France and will add another 17k tons per annum from 2013 at a new facility to be built at the Lanxess site in Ontario, Canada. The two companies are also discussing an extension of their partnership to include other products with regulatory compliance at their core.

Deals

Equinox Chemicals LLC has acquired Adco Cleaning Products LLC, a US manufacturer of speciality chemicals and detergents. The acquisition will enhance the US group’s range of products used in commercial laundry, dry cleaning, institutional cleaning and janitorial applications.

Lanxess has acquired a minority stake in BioAmber Inc, a US developer of phthalate-free plasticisers derived from bio-based succinic acid. The acquisition builds on the German group’s acquisition of Unitex Chemical Corp last year.

Marubeni Corp has acquired Dasch UK Ltd, a UK distributor of agrochemicals for horticultural and ornamental applications. The acquisition will enhance the UK coverage of the Japanese group’s Agrovista UK crop management and protection business.

Heraeus Holding GmbH has acquired Daychem Laboratories Inc, a US manufacturer of organic chemicals for the aerospace, display, and electrical equipment and semiconductor industries. The acquisition will be integrated into the German group’s Thick Film Materials division where it will strengthen its market position as a global supplier to the electronics industry with a particular focus on Asian markets.

Fabbrica Italiana Sintetici SpA has acquired Delmar Chemicals Inc, a Canadian provider of contract and scale-up manufacturing services for active pharmaceutical ingredients. The acquisition will provide the Italian group with its first facility in North America.

A consortium of Italian private equity firms comprising ClessidraIdea Capital Funds and Private Equity Partners has acquired a 55% stake in Euticals SpA, an Italian manufacturer of active pharmaceutical ingredients and intermediates. The $220m transaction will allow the consortium to support Euticals in its international expansion and product diversification strategy. Italian private equity firm Mandarin Capital Partners will retain a 20% stake in the company.

Bayer AG has acquired the animal health division of KMG Chemicals Inc. The acquisition will enhance the German group’s portfolio of insecticides for the US market including a range of actives which will enhance its current product range of cattle ear tags, dusts, farm hygiene sprays and pour-ons.

Ostchem Holding AG has acquired a 58% stake in Ukragro NPK PJ-SC, a Ukrainian manufacturer and supplier of fertilisers, from Linas Agro Group AB. The $35m transaction will allow Ostchem to build on the expansion of Ukragro’s existing production capacity of 200k tons per annum.

BASF SE has acquired the battery electrolytes business of Merck KGaA. The acquisition includes all of the technologies and products for enhancing battery performance including a complete line of finished electrolyte formulations that are marketed under the SelectiLyte brand, as well as a variety of additives for electrolytes used to produce lithium-ion batteries. The unit will be integrated into BASF’s newly formed Battery Materials division.

Safic-Alcan SA has acquired Necarbo BV from PPG Industries Inc. Necarbo is a Dutch distributor of additives and chemicals for the coatings, inks and water treatment industries. The acquisition will strengthen Safic-Alcan’s position within the coatings and inks industry in the Benelux region, France, Germany, Malaysia and the Middle East.

Air Products and Chemicals Inc has acquired ROVI Cosmetics International GmbH, a German manufacturer of ingredients for the cosmetics industry. The acquisition will significantly enhance the US group’s speciality ingredients portfolio for the personal care industry with a particular focus on advanced skin care actives.

Wienerberger AG has acquired the remaining 50% stake in Pipelife International GmbH from Solvay SA. Pipelife is an Austrian manufacturer of plastic pipes. The disposal will allow Solvay to exit from a non-core downstream activity and focus on its integration of Rhodia.

Symrise AG has acquired Trilogy Fragrances LLC, a US manufacturer of natural perfume oils. The acquisition will reinforce the group’s range of natural products for the fine fragrance, oral care and personal care markets. Symrise has also acquired the Brazilian fragrance activities of Belmay Inc. The acquisition will extend the group’s reach in Latin American where it will enhance its portfolio of products for the fine fragrance, hair care and personal care markets in this geography.

Sika AG has acquired Yean-Il Industrial Co Ltd, a South Korean manufacturer of waterproofing chemicals. The acquisition will expand the Swiss group’s range of tunnel waterproofing membranes and reinforce its presence in the South Korean infrastructure sector.