Chemical Distribution – Industry and M&A Outlook

Strong value contribution of distributors to both – chemical producers and pro-cessing companies – is leading to persisting market growth

Consolidation set to continue as scale and reach become critical factors

2

Table of contents

Market & competition……………………………………………………………………...1

Overview………………………………………………………………………………………………………… 1

Value contribution of chemical distributors………………………………………………………………. 2

Value chain……………………………………………………………………………………………………... 3

Strong growth expected to persist…………………………………………………………………………. 4

The competitive landscape…………………………………………………………………………………. 5

Consolidating market…………………………………………………………………………………………. 6

Recent transactions in chemical distribution industry……………………………… 7

Most relevant transaction between 01/01/2014 and 01/04/2015……………………………………. 7

Pricing and stock performance………………………………………………………………………...…...14

About M&A International Inc…………………………………………………………....15

About the chemicals & pharmaceuticals industry group……………………………………………. 15

M&A International Inc. case studies in chemical industry……………………………………………. 16

Our industry experts in Germany

DR. LUTZ BECKER Managing Partner

Lutz is particularly active in the area of retail and wholesale sector. He founded

and led the retail group of M&A International Inc. for more than 10 years.

ALI TAŞBAŞI Managing Director

Ali disposes of a broad transaction experience with cross border transactions.

He is Head of Angermann’s Chemical and Pharmaceutical Industry Group.

MATTHIAS KNOKE Senior Consultant

Matthias has extensive M&A experience focusing mainly on transactions in the

engineering, construction and chemical industries.

CHRISTIAN JELLENTRUP Consultant

Christian gained broad knowhow of challenges and success factors of whole-

sale and specialized trade business through several M&A-processes in the past.

1

Market and competition

Overview

The chemical industry, consisting of pro-

duction, distribution and consumption, is

an important driver of the global econo-

my, with estimated global annual con-

sumption of EUR 2,560bn in 2012.

About 90% of the chemical production is

distributed by the production companies, leaving 10% share for (third-

party) distributors. The 10% represents a market of about EUR 165bn

per year as shown in the table below. The market share of (third-party)

distributors is expected to increase as a result of outsourcing.

The (third-party) distribution market consists of specialty (ca. 70bn)

and commodity distribution (ca. 95bn).

Source: BCG, The growing opportunity for chemical distributors, July 2013

Region/MarketNominal GDP

(EURbn)

Chemical

consumption

(EURbn)

Chemicals as

% of GDP

Distribution

relevant

chemical

consumption

(EURbn)

Share of

third-party

distributors

(%)

Size of third-

party

distribution

market

(EURbn)

Europe 16,170 567 3.5% 401 11% 42.9

Germany 2,644 119 4.5% 86 10% 8.5

France 2,029 88 4.3% 56 9% 5.1

United Kingdom 1,901 42 2.2% 26 11% 2.9

Italy 1,569 54 3.4% 47 11% 5.1

Spain 1,066 37 3.4% 24 10% 2.5

Other Western Europe 3,615 121 3.3% 80 9% 6.9

Other Cent ral and Eastern Europe 3,347 106 3.2% 82 15% 11.9

North America 13,613 393 2.9% 215 14% 29.9

Asia-Pacif ic 17,609 1,285 7.3% 894 7% 62.5

Lat in America 4,710 208 4.4% 141 12% 17.3

Middle East 3,403 107 3.1% 81 15% 12.2

Total world 55,504 2,560 4.6% 1,732 10% 164.8

2

Value contribution of chemical distributors

Traditionally, chemical producers distribute their

own products. Direct supply still accounts for

about 90% of total global distribution. Large

end-users will continue to buy directly from the

manufacturer and account for the bulk of pro-

ducers’ output

Dedicated “key account” management struc-

tures and processes have been set up by pro-

ducers to serve these large customers. However,

for smaller customers and countries where producers have limited

operations, most chemical producers struggle to develop an effective

sales model. Particularly as the need for greater cost efficiency has

led to continuing downward pressure on the size of sales forces in the

field and the level of technical assistance offered to customers. By of-

fering efficient logistics for smaller quantities, complemented by val-

ue-added services, chemical distributors reduce complexity for cus-

tomers and suppliers.

As a result of the abovementioned trends, producers are handing

more and more of their marketing of smaller quantities to distributors.

This outsourcing trend is set to continue, despite that some markets of

processing companies are consolidating

Value added to chemical producers Value added to processing companies

Broad product portfolio with comple-

mentary products (often sub-sector spe-

cific)

Access to reputable suppliers

Competitive (and stable) pricing

Stock management and JIT deliveries

Competent and knowledgeable sales

team

Technical support / problem solving skills

Value-added services (e.g. VMI, mixing,

blending, bundling, repacking, formula-

tion)

Easy access to samples

Drum return handling

Financing and credit in line with local

terms

Market share and penetration

Logistics service including storage and

packaging

Market intelligence and transparency

Demand forecasting and planning

Market development capabilities

Trainable staff with good technical

knowledge

Modern IT infrastructure allowing auto-

mated information exchange

Low cost-to-serve for small lots

3

Value chain

The value chain of a distributor starts with the

sourcing, purchase, transport and storage of

sometimes large-scale quantities of diverse

raw materials and ingredients. Key elements in

the value chain of a distributor include: sourc-

ing from the right producers to ensure high

quality and a reliable product offering; taking

physical ownership of products, warehousing

them, and mixing, blending, and repackaging

them according to customers’ needs. Im-

portant elements are the formulating expertise

and technical support from dedicated appli-

cation laboratories. The next step is selling and

physically transporting the goods to custom-

ers. Important issues to take into account with

transporting are:

o Leveraging high route density based on lo-

cal scale

o Providing just-in-time delivery and vendor

managed inventory service

o Taking care of environmental friendly

packaging return or disposal service

o Offering one-stop-shop solutions

Chemical distributors stand apart from logis-

tics-only companies and from trading compa-

nies. Chemical distributors do take ownership

of products and do repack and assemble the

product portfolio according to customer

needs. Also, chemical distributors do offer de-

velopment and testing services for improving

customer products and production processes

The role and added-value services of chemi-

cal distributors play a crucial part in the supply

chain

Bundling, outbound

transport

Producers

Processing companies

Vendor managed inventory

Technical support

Mixing, blending,

formulating

Filling, packaging, labelling

Storage

Inbound transport

Sales, purchase

Ch

em

ica

l d

istr

ibu

tors

4

Strong growth expected to persist

Overall the (third party) chemical distribution market grew between

2008 and 2013 with a CAGR of 6.5%, divided between the two seg-

ments commodity (+6.2%) and specialty chemical (+7.0%).1

The distribution market grew, amongst others, due to an increase in

chemical consumption and outsourcing. The latter is a result of the

factors listed below:

The growth of (third party) chemical distribution as a result of increas-

ing chemical consumption and outsourcing is expected to persist with

a CAGR of 5.6% from 2013 to 2018.

Reduce complexity

Producers turn to distributors for distribution to reduce complexity, especially in mar-

kets with a fragmented customer base (such as emerging markets) or with smaller

order sizes (especially in specialty chemicals)

Value-added services

Value-added services, such as outsourced inventory management, blending and

formulation, are increasingly important to producers and often drive their choice of

distributor

Increasing standards

International distributors are better equipped to meet increasing quality standards,

as they have segment-specific expertise

Access to new markets

Producers turn to distributors to improve market access and geographical reach,

especially in emerging markets

Streamline financials

Producers want to reduce costs; outsourcing eliminates the need for an extensive

sales organisation. Also, by outsourcing to distributors producers can manage their

working capital more effectively

40

70

100

130

2008 2009 2010 2011 2012 2013 2014F 2015F2016F 2017F 2018F

EURb

n

Specialty Commodity

5

The competitive landscape

• Despite the consolidation we have seen,

the chemical distribution market is frag-

mented with more than 10,000 distribu-

tors globally across a range of technical

categories, including petrochemicals,

solvents, polymers and specialty chemi-

cals.

• The market can be divided into two

segments:

o Commodity: This group is focused on

bulk products and can be seen as

wholesalers. The largest two are

Brenntag and Univar. They are the on-

ly chemical distributors which have a

leading position in Europe as well as

North America. Together they have

17 % market share in Europe and 12%

in North America.

o Specialty: This group is focused on be-

ing a value adding distribution part-

ner, with the largest European being

IMCD, Azelis, Biesterfeld, Stockmeier,

Barentz and Caldic.

• As mentioned before, there is a main

trend whereby companies move to-

wards global distributors and make a

choice between being a commodity or

specialty distributor

• Both segments have distinctly different

business models:

Product range

Product range

Specialty

Commodity

High volume, large parties

Purchasing power

Broad global presence

Wholesaler

Transparent price setting

Exclusive contracts

Regional scale, local reach

Value adding services

Culture of dialogue

Specialty

Key success factors

Commodity

Reg

ion

al

Pre

sen

ce

European competitive field

Pan

-Eu

rop

ean

Commodity Specialty

Global competitive field

Pre

sen

ce

Reg

ion

al

Glo

bal

6

Consolidating market

In the past decade, the third party chemical distribution market has

been consolidating. The largest consolidation took place in Europe

and North America. Since 1991, the four most acquisitive companies

(Brenntag, Azelis, IMCD and Univar) completed over 200 acquisitions

However, all debt financed deals came to a standstill during the crisis

of 2008−2009, which caused a decrease in M&A activity

In 2010 M&A picked up again in all regions. Europe is still the continent

which shows the majority of the transactions due to the maturity of the

industry

Source: DistriConsult, Capital IQ, Mergermarket, ICIS, BCG, Deloitte

The consolidation in chemical distribution market is set to continue:

o Reduction in the number of distributors relationships maintained by

principals

o Expanding geographical coverage as required by both principals

and clients

o Extending product portfolio coverage in application or end-use

segment in order to offer a one-stop-shop

o Extending capabilities such as blending and formulating in order to

be a full service provider

o Realize economies of scale

3

20

25 26 27

36

0

10

20

30

40

2009 2010 2011 2012 2013 2014

Europe North America Asia-Pacif ic Latin America Middle East / Africa

M&A transactions over the years

7

Recent transactions in chemical distribution industry

Since January 2014 there have been more than 50 disclosed transac-

tions in the global chemical distribution industry. Most active acquirers

have been Brenntag AG (6 acquisitions), Barentz B.V. (2) and Univar

Inc. (2)

Consolidation is driven by European and Northern American players

focussing mainly on geographical and portfolio extension

Interest of Private Equity Investors remained strong as ongoing consol-

idation

Details on deal value were kept confidential apart from exceptional

cases

Most relevant transaction between 01/01/2014 - 01/04/2015:

Acquirer

Univar USA Inc.

Target

Key Chemical Inc.

Strategic rationale

Univar USA Inc. a leading distributor of basic chemicals, specialty

products, and related chemistry services, announced today it has

acquired all of the outstanding stock of Key Chemical, Inc., one of

the largest suppliers of hydrofluosilicic acid (fluoride) in the U.S. Key

Chemical helps strengthen Univar's leading position in the munici-

pal water treatment market by adding fluoride to our offering to

customers.

Deal type

Strategic:

portfolio &

scale

Date

Apr. 2015

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

undisclosed Family Office

Target

Barentz B.V.

Strategic rationale

An undisclosed bidder has acquired an undisclosed stake in

Barentz B.V., the Netherlands-based company engaged in market-

ing and distribution of specialty and commodity raw materials. The

transaction is in line with Barentz’s strategy to expand its product

portfolio. The funds from the acquisition would be used to expand

Barentz reach, growth, and presence globally.

Deal type

PE

Date

Mar. 2015

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

8

Acquirer

Calcid Canada Inc.

Target

The Ingredient Company Inc.

Strategic rationale

Calcid Canada Inc., the Canada-based manufacturer and distrib-

utor of ingredients and additives and a subsidiary of Calcid B.V.,

has acquired The Ingredient Company Inc., the Canada-based

distributor of savoury and nutrition ingredients. The acquisition will

enable Caldic to enhance its footprint in the Canadian food in-

gredient market and further in the Savoury and Nutrition market

sectors.

Deal type

Strategic:

portfolio

Date

Mar. 2015

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Brenntag AG

Target

Lionheart Chemical Enterprises Ltd

Strategic rationale

Brenntag AG has agreed to acquire Lionheart Chemical Enterprises

(Pty) Ltd, the South Africa-based company engaged in distribution

of food & beverage products. The acquisition will strengthen

Brenntag’s position in the South African chemical distribution mar-

ket. The acquisition of Lionheart’s product portfolio is complemen-

tary to other activities of Brenntag in the region through Multisol

and Crest Industrial Chemical businesses.

Deal type

Strategic:

portfolio

Date

Feb. 2015

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Apax Partners LLP

Target

Azelis S.A.

Strategic rationale

Apax Partners LLP, UK-based private equity firm has agreed to ac-

quire a majority stake in Azelis SA, Belgium based distributor of spe-

ciality chemicals, polymers and related services. The transaction

will expand Azelis' business operations and develop its specialist

product portfolio. Post transaction, Mr. Hans-Joachim Muller, the

CEO of Azelis together with management will remain with compa-

ny.

Deal type

PE

Date

Feb. 2015

(pending)

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Brenntag AG

Target

Surtiquimicos S.A.

Strategic rationale

Brenntag AG has agreed to acquire Surtiquimicos S.A., the Colom-

bia-based distributor of specialty chemicals. The transaction is in

line with Brenntag's strategy to increase its presence in Latin Ameri-

ca. The transaction will enable Surtiquimicos to further develop its

portfolio in Colombia, thereby strengthening its position in the re-

gion.

Deal type

Strategic:

portfolio &

geography

Date

Dec. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

9

Acquirer

Umicore SA

Target

Todini & Co. S.p.A.

Strategic rationale

Umicore SA the Belgium-based materials technology group,

through its Luxembourg-based wholly owned subsidiary Umicore

International, has agreed to acquire the remaining 52% stake in

Todini and Co. S.p.A., the Italy-based company engaged in distri-

bution of industrial chemical products. The transaction will enable

Umicore to further expand it's activities and strengthen the product

portfolio.

Deal type

Strategic:

forward

integration

Date

Dec. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Brenntag AG

Target

Fred Holmberg & CO AB

Strategic rationale

Brenntag AG has agreed to acquire Fred Holmberg & Co AB, the

Sweden-based company engaged in distribution and trading of

chemicals and providing mixing and blending activities. The acqui-

sition will further strengthen and expand Brenntag’s industrial chem-

icals portfolio in the Sweden, resulting into increase in product of-

ferings to its customers and adding value for Brenntag’s business

partners.

Deal type

Strategic:

portfolio

Date

Dec. 2014

(closed)

Deal value (mEUR)

78

EBITDA-Multiple

35

Acquirer

The Riverside Company

Target

Drex-chem (m) Sdn Bhd

Strategic rationale

The Riverside Company, US-based private equity firm, has acquired

Drex-chem (m) Sdn Bhd, Malaysia-based distributor of specialty

chemicals. The transaction helps Riverside to expand geograph-

ically with the strong technical capabilities and knowledgeable

sales force of Drex-Chem in the ASEAN region.

Deal type

PE

Date

Dec. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Univar Brasil Ltda. (Univar Inc.)

Target

D’Altomare Quimica Ltda.

Strategic rationale

Univar Brasil Ltda., the Brazil-based distributor of specialty chemicals

and ingredients, and subsidiary of Univar Inc., the US-based com-

pany engaged in distribution and marketing of commodity and

specialty chemicals, has acquired D'Altomare Quimica Ltda, the

Brazil-based distributor of specialty chemicals and ingredients.

The acquisition will enable Univar to expand its geographic foot-

print and market presence in Brazil and across Latin America.

Deal type

Strategic:

scale

Date

Nov. 2014

Deal value (mEUR)

40 (est.)

EBITDA-Multiple

undisclosed

10

Acquirer

Advent International Corporation

Target

Grupo Transmerquim, S.A.

Strategic rationale

Advent International Corporation, the US-based venture capital

and private equity firm, has agreed to acquire Grupo Transmer-

quim, S.A. (GTM), the Costa Rica-based company commercializes

and distributes raw materials and chemical products. The transac-

tion will provide growth opportunities to GTM and enable it to ex-

pand its operations in Latin America. Post transaction, the existing

management team of GTM will continue with the company.

Deal type

PE

Date

Nov. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Sagard Private Equity Partners

Target

Safic-Alcan Groupe

Strategic rationale

Sagard Private Equity Partners has acquired Safic-Alcan Groupe,

the France-based distributor of specialty chemicals. Safic-Alcan is

an international distributor of speciality chemicals with presence in

all of Western Europe. The group is a leader in the rubber market

and keeps on developing in Coatings and Fine Chemicals to

strengthen and gain new positions.

Deal type

PE

Date

Oct. 2014

Deal value (mEUR)

250 (est.)

EBITDA-Multiple

undisclosed

Acquirer

Brenntag AG

Target

Pioma Chemicals Pvt. Ltd.

Strategic rationale

Brenntag AG has agreed to acquire the Specialties chemicals

distribution business of Pioma Chemicals Pvt. Ltd., India-based dis-

tributor and supplier of specialty excipients and functional ingredi-

ents. This transaction is in line with Brenntag’s strategy of solidifying

its business in India by increasing its reach of local strategic distribu-

tors, customer relations and strengthening its portfolio of high quali-

ty products.

Deal type

Strategic:

geography

Date

Sep. 2014

Deal value (mEUR)

26

EBITDA-Multiple

undisclosed

Acquirer

IMCD Group B.V.

Target

Danasia Inc.

Strategic rationale

IMCD Group B.V., the Netherlands-based company engaged in

marketing, distribution, and sale of specialty chemicals and food

ingredients, has acquired Danasia, Inc., the Philippines-based im-

porter and distributor of the leading brands of raw food and indus-

trial ingredients. The acquisition marks the initial entry of IMCD in the

Philippines’ market. The transaction will provide IMCD with a valua-

ble platform to expand and strengthen its presence.

Deal type

Strategic:

geography

Date

Sep. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

11

Acquirer

Composites One LLC

Target

Composite Business, Nexeo Inc. LLC

Strategic rationale

Composites One LLC, the US-based company engaged in the dis-

tribution of composite materials, has agreed to acquire Compo-

sites Distribution Business of Nexeo Solutions, LLC, the US-based dis-

tributor of chemicals, plastics and composites. The acquired busi-

ness generated revenue between USD 250m and 300m. The acqui-

sition will enable Composites One to offer wide-ranging product

line, innovative technical support and dependable service.

Deal type

Strategic:

scale &

portfolio

Date

Jul. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Peter Greven GmbH & Co. KG

Target

REDA Chemicals

Strategic rationale

Peter Greven GmbH & Co. KG, the Germany-based producer and

supplier of oleochemical additives and auxiliaries, has acquired

REDA Chemicals, the Saudi Arabia-based company engaged in

distribution of chemicals, from REDA Group, the Saudi Arabia-

based company engaged in marketing and distribution of industri-

al and specialty chemicals, food ingredients, fire and safety

equipment, and technology based solutions.

Deal type

Strategic:

geography

Date

Jul. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Brenntag AG

Target

Pillchem Inc.

Strategic rationale

Brenntag AG has acquired Philchem, Inc., a US-based manufac-

turer and supplier of dry blends and adhesives, from Performance

Chemicals Intermediate Holding Company. Philchem reported

revenues of USD 162m in 2013. The transaction is expected to bene-

fit the customers and suppliers of Brenntag. The acquisition will

fetch deliberate competencies to Brenntag and expand further

expand its foot prints in North America.

Deal type

Strategic:

scale & effi-

ciencies

Date

Jun. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Barentz B.V.

Target

MP Maustepalevu Oy

Strategic rationale

Barentz B.V., the Netherlands-based company engaged in market-

ing and distribution of specialty and commodity chemicals has

acquired MP Maustepalvelu Oy, the Finland-based supplier of food

ingredients. The acquisition will enable Barentz to offer more choic-

es in Blends and will also provide their customers with one stop

shopping experience. The transaction is a result of Barentz’s search

to reinforce their research and development.

Deal type

Strategic:

backward

integration

Date

Jun. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

12

Acquirer

DKSH Holding AG

Target

Zeus Quimica S.A.

Strategic rationale

DKSH Holding AG has acquired Zeus Quimica S.A., the Spain-based

specialty chemicals distributor. Zeus generated revenues of EUR

40.79m in 2013. This acquisition is part of the strategy of consolidat-

ing of the chemical distribution industry. Via this acquisition DKSH is

moving forward to become a pan-European Market Expansion

Services provider. DKSH’s clients will now be able to make use of

Zeus service portfolio on the Iberian Peninsula region.

Deal type

Strategic:

portfolio &

scale

Date

Jun. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Krahn Chemie

Target

Pietro Carini S.p.A.

Strategic rationale

Krahn Chemie GmbH, the Germany based distributor of chemical

raw materials and specialty chemicals, has agreed to acquire

Pietro Carini S.p.A., the Italy based specialty chemical distributor.

KRAHN will expand into Italy through this acquisition. Pietro Carini

employs 27 people and has 1,100 active customers.

Deal type

Strategic:

geography

Date

Apr. 2014

Deal value (mEUR)

20 (est.)

EBITDA-Multiple

undisclosed

Acquirer

Brenntag AG

Target

Gafor Distribuidora

Strategic rationale

Brenntag AG has agreed to acquire Gafor Distribuidora, the Brazil

based chemical distribution company. The acquisition will allow

Brenntag to expand their market presence in Brazil and will add

critical mass to their existing operation in Latin America. Gafor

generated USD 70m in revenue in 2013.

Deal type

Strategic:

portfolio

Date

Apr. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

IMCD Group B.V.

Target

Kushalchand Sons

Strategic rationale

IMCD Group B.V., the Netherlands-based company engaged in

marketing, distribution, and sale of specialty chemicals and food

ingredients, has acquired Kushalchand Sons, the India-based dis-

tributor of food speciality ingredients to the fast growing processed

food industry. Kushalchand Sons generated revenues of EUR 9m in

2014. The acquisition is in line with IMCD’s strategy of expanding its

food processing business in India.

Deal type

Strategic:

scale

Date

Apr. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

13

Acquirer

Barentz B.V.

Target

Additive Solutions Pty Ltd.

Strategic rationale

Barentz B.V., the Netherlands-based company engaged in market-

ing and distribution of specialty and commodity chemicals has

acquired a majority stake in Additive Solutions Pty Ltd, the Australia-

based company engaged in marketing specialty ingredients to

various sectors. Barentz expands its business in Australia and New

Zealand with the acquisition. Additive Solution will also distribute

the LI Frank and Vitablend ingredients and products.

Deal type

Strategic:

geography

Date

Apr. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Helm AG

Target

GEBLASA S.A.

Strategic rationale

Helm AG, the Germany based distribution company specializing in

chemicals, has acquired GEBLASA S.A., the Spain-based distributor

specialized in the distribution of Acids and Lyes as well as Solvents.

To support its future growth GEBLASA S.A. will enhance HELM’s

strong position in the Mediterranean Region.

Deal type

Strategic:

geography

Date

Apr. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

Acquirer

Nexeo Solutions LLC

Target

Archway Sales Inc. & Jacaab LLC

Strategic rationale

Nexeo Solutions, LLC has agreed to acquire Archway Sales, Inc.

and Jacaab LLC. Nexeo Solutions, LLC, the US based company, is a

distributor of chemicals, plastics, and composites. Archway Sales,

Inc., the US based company, is engaged in selling and distributing

specialty chemical products. Jacaab LLC, the US based company

is engaged in operating as a chemical manufacturer.

Deal type

Strategic

Date

Feb. 2014

Deal value (mEUR)

125

EBITDA-Multiple

9,6

Acquirer

Management Team

Target

Alphamin S.A.

Strategic rationale

The management of Alphamin S.A., the Belgium based distributor

of speciality polymers and waxes, has agreed to acquire the com-

pany, in a management buyout transaction. The management

team is led by Mr. Marc Beuken, the CEO of Alphamin S.A. Al-

phamin reported revenues of EUR 36.50m and EBIT of EUR 2.3m.

Deal type

MBO

Date

Jan. 2014

Deal value (mEUR)

undisclosed

EBITDA-Multiple

undisclosed

14

Pricing and stock performance

Double-digit Trading multiples

Average acquisition multi-

ples of chemical distributors

during 2010-2014 were

around 7.5xEBITDA. Large

companies were generally

speaking sold for higher mul-

tiples and vice versa

High trading multiples of

large listed chemical distribu-

tors allow value creation

through acquisitions

Double digit trading multiples

create a favorable IPO envi-

ronment:

On 27 July 2014, IMCD

launched an IPO on the Eu-

ronext Amsterdam Stock Ex-

change

Univar announced it is in the

process of launching an IPO.

However, timing of the IPO is

uncertain as many of its cli-

ents are hurt by the recent

collapse of crude oil prices

90

95

100

105

110

115

120

125

130

135

140

3-1

0-1

4

17-1

0-1

4

31-1

0-1

4

14-1

1-1

4

28-1

1-1

4

12-1

2-1

4

26-1

2-1

4

9-0

1-1

5

23-0

1-1

5

6-0

2-1

5

20-0

2-1

5

6-0

3-1

5

20-0

3-1

5

3-0

4-1

5

MSCI WORLD Aceto Corp IMCD NV Brenntag AG

0.0x

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x

14.0x

16.0x

18.0x

2008A 2009A 2010A 2011A 2012A 2013A 2014E 2015E 2016E

EV/EBITDA multiples

Aceto Brenntag IMCD Median

15

About M&A International Inc.

World’s oldest and largest organization

of independent M&A consultancies and

investment banking firms

650 consultants in 42 countries offer a

global coverage by providing access to

a variety of investors

In the last five years, more than 1,400

transactions totaling to more than US $75

billion in transaction value

Clear internal regulations and over 30 years of experience ensure the

smooth course of the project and mean cost and process transpar-

ency for the client

Flat hierarchies and short communication channels allow a high flexi-

bility and rapid response capability

Several times a year the consultants of MAI meet face-to-face to pro-

fessionalize the cooperation

Within M&A International, industry experts of several countries have

formed industry groups to bundle their local market expertise.

About the chemicals & pharmaceuticals industry group

The chemical and pharmaceuticals group focuses on offering advisory

services to companies in the chemicals, pharmaceuticals and related

industries.

The chemicals and pharmaceuticals group con-

sists of a highly experienced team, which is well-

versed in advising transactions alongside the

whole value chain of chemicals – from chemical

production via distribution through to processing.

Further, due to our extensive contacts to leading

international players in the market, M&A Interna-

tional is well positioned to advise complex, inter-

national transactions as impressively shown by

the following case studies:

16

M&A International Inc. case studies in chemical industry

Holland Corporate Finance (The Netherlands)

advised capital increase of Barentz B.V.

Barentz, a leading distributor of ingredients, is

pleased to announce that it has found a strong

equity partner with the assistance of Holland Cor-

porate Finance/M&A International Inc.

The ingredients distribution market has seen major

consolidation activities in the past decade. Hidde

van der Wal, CEO of Barentz International, com-

ments: “The consolidation trend in the distribution

business is driven by, among others, the reduction

of distributor relationships maintained by suppliers

and a globalization of the industry, which force

ingredients distributors to increase their geograph-

ical reach and expand their product portfolio in

order to achieve critical mass and realize econo-

mies of scale. These drivers are expected to result

in a further consolidation in the coming years.”

Barentz has had an active role in the market consolidation, which in-

cluded the successful acquisitions of Vitablend (2008), Agri Nutrition

(2008), Forum Products (2011) and Maustepalvelu (2014). The majority

participations in RFI (2011), Prochifar (2012), NK Chemicals (2013) and

Additive Solutions (2014) have enabled Barentz to strengthen its market

position and expand its geographical reach.

Marc van de Put, partner at Holland Corporate Finance, adds: “We are

pleased that Barentz can kick off the year with a capital investment from

a strong equity partner which perfectly fits with the Barentz culture. Our

next step together is to find suitable acquisition candidates in Barentz’

core distribution markets in the food & nutrition, pharmaceutical, per-

sonal care and animal nutrition industries in order to accelerate the

growth strategy of Barentz.”

Hidde van der Wal concludes: “We are delighted with this new capital

investment to strengthen our position in a number of promising markets.

With a full product portfolio and extended geographical coverage with-

in reach, we look forward to serving our customers and stakeholders

even better.”

17

Arietti & Partners (Italy), Audon Partners

(Denmark) and Avantus (Sweden) advised

Azelis SA on the acquisition of Brøste A/S

Brøste has joined the pan-European chemicals

distribution group Azelis in a deal that will pro-

vide Azelis with geographic coverage of the

important Nordic region.

Arietti & Partners, M&A International’s Italian

partner who had previously advised Azelis on an

acquisition in Germany, was appointed as lead

advisor in conjunction with M&A International’s

Danish and Swedish partners, Audon Partners

and Avantus Corporate Finance.

Brøste, the leading distributor of additives, in-

gredients and raw materials in the North Euro-

pean market, has a turnover exceeding 120

million and supplies chemicals from blue chip

producers.

Angermann M&A International (Germany)

advised Langley Holding on the acquisition

of DC Druck plus Beteiligungs GmbH

The Langley Holdings plc (Langley) has pur-

chased, through its subsidiary Sheetfed Holdings

Limited, all shares of DC plus Beteiligungs GmbH

(DC) from the insolvency receiver Dr. Jan

Markus Plathner (Brinkmann & Partner). Financial

details have not been disclosed.

DC is the one-stop-shop for its customers offer-

ing a unique combination of products and ser-

vices. The company's product portfolio covers

almost all chemicals and consumables required

by a printing company within its press room.

Besides its products, DC also takes care of the

waste management for its customers and offers

reverse logistic services.

18

For any further information and a confidential discussion about

company divesture, acquisition or succession planning, please do

not hesitate to arrange an appointment with our sector experts:

www.angermann-ma.de www.mergers.net

ali.tasbasi@mergers.net marc.vandeput@mergers.net

matthais.knoke@mergers.net attilio.arietti@mergers.net

christian.jellentrup@mergers.net jonas.knudsen@mergers.net

ABC-Straße 35

20354, Hamburg

Fon: +49 40 3 49 14 - 0

Fax: +49 40 3 49 14-149

Hamburg Frankfurt Stuttgart

Campus Kronberg

61476, Kronberg

Fon: +49 6173 7 02-115

Fax: +49 6173 7 02-333

Bolzstraße 3

70173, Stuttgart

Fon: +49 711 22 45 15-12

Fax: +49 711 22 45 15-10

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