Chemicals

Q1 of 2023 saw 6 deals in the Chemicals sector. This was a marginal increase on the previous quarter but is broadly comparable with industry activity over the past few years. Notable deals executed during Q1 2023 include:

• Solenis’ acquisition of disinfectant manufacturer Diversey through a $4.6bn LBO.
• In the UK, Hammond Chemicals’ receipt of an undisclosed amount of development capital from Euston Capital Trust.

The deals activity in this sector has been influenced by:

• Consolidation – in a mature sector and with downward pressure on margins brought about by rising input costs, operators have sought merger opportunities as means of reducing costs.
• Portfolio extension – market operators have sought to widen their product portfolios through acquisition of complementary entities.

Restructuring activity in this sector remains relatively high. Volatile energy prices, higher costs, shortages of key input materials and changing global trading patterns have created some uncertainty. In addition, chemicals businesses are having to respond rapidly to the climate emergency, placing a focus on sustainable production practices and limiting environmental harm.