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Mergers and acquisitions in the sub-$250m global chemicals bracket

corresponding

MATT J. DIXON
Head of mergers, acquisitions, and divestments at Chemicals Corporate Development Partners,

Abstract

The article comments on what Mr Dixon sees are the main drivers behind current high levels of deal-making in the sub-$250m global chemicals bracket and how some CEOs and owners are able to capture strategic potential and outperform the market.

Mr Dixon looks at each of these drivers and concludes that both sides of deals can capture real strategic value, but only if they are prepared to be pro-active, engage with the wider market, and build a position of strength before approaching the negotiating table.


INTRODUCTION

The global chemicals industry has witnessed a multi-year run of transactions at historically high valuations, a trend which has continued into the first half of 2018. A consistent level of deal activity has been observed across the lower, middle and upper market tiers across all the segments we cover including fine, speciality, distributors, technology, and others.

However, while this market buoyancy creates opportunities for companies committed to actively managing their strategic corporate development, for those with a more inward-looking approach it can lead to missed opportunities and worse, lost market position.

Looking specifically at corporate takeovers of sub-$250m businesses, buyer motivations are typically founded on one or more of three main drivers: pressure for accelerated innovation, the search for growth in new markets, and the ongoing influx of private equity investment.

ACCELERATING INNOVATION

Often prompted by intense commercial competition, buyers are continually seeking opportunities to add capability, quality, and volume to their innovation processes. This can t ...