Sector News

Advent-led GTM buys Brazil chemical firm quantiQ for $172 million

January 11, 2017
Chemical Value Chain

GTM Holdings SA, Latin America’s No. 1 independent distributor of chemical products, has agreed to pay 550 million reais ($172 million) for Brazilian peer quantiQ Distribuidora Ltda, in an effort to gain more foothold in the region’s biggest country.

Under terms of the deal, GTM Holdings, which is owned by private equity firm Advent International Corp, will pay 450 million reais when the deal closes, with the remainder being disbursed within the next 12 months. The acquisition of quantiQ, formerly part of Brazil’s Braskem SA, is GTM’s third since June.

The deal will allow GTM, which was founded in Guatemala 31 years ago, to broaden the wide array of suppliers for the company’s 12,000 customers in 12 Latin American countries, said Manuel Garcia Podestá, a director at Advent. An advantage of the quantiQ deal is the proximity it will create with Braskem (BRKM5.SA), Latin America’s No. 1 resin maker, he added.

“This deal is transformational for GTM in the sense that it will significantly expand the scope of our suppliers, creating value and synergies for GTM’s customers,” Garcia Podestá said in an interview from Bogota, where he is based.

Mergers and acquisitions among Latin America’s chemical and industrial companies are poised to gain traction this year, as two years of a deep downturn and an ongoing recovery in global prices are making some targets attractive for large global players, bankers said.

Room for acquisitions of chemical distributors in Brazil remain large, Advent’s Garcia Podestá said, noting that GTM will gauge organic growth or acquisition opportunities carefully. Brazil’s top ten chemical distributors control about 30 percent of the market.

For GTM, the purchase of quantiQ will give it access to a portfolio of over 5,000 clients in the country in 50 different market segments ranging from cosmetics to pharmaceuticals and food processing.

In turn, Braskem, which recently signed a leniency deal with Brazilian and U.S. authorities over its involvement in a graft and bribery scandal in Brazil, could be looking to divest assets as it seeks to cut costs by 400 million reais a year.

The sale of quantiQ “is in line with Braskem’s strategy of reinforcing the focus on petrochemical operations,” São Paulo-based Braskem said in a Tuesday securities filing.

The transaction hinges on regulatory approval. Itaú BBA SA, the investment-banking unit of Itaú Unibanco Holding SA and law firm Lobo & de Rizo Advogados, advised GTM on the transaction.

By Guillermo Parra-Bernal

Source: Reuters

comments closed

Related News

November 21, 2021

Neste awarded €88-Million grant for green hydrogen and CCS projects at Porvoo refinery

Chemical Value Chain

Neste announced that the EU Innovation Fund has given a positive grant decision of €88-million funding to Neste’s green hydrogen and CO2 capture & storage project, which aims to quickly and efficiently reduce greenhouse gas emissions at the Porvoo refinery in Finland.

November 21, 2021

Shell plans to move HQ to UK

Chemical Value Chain

Shell has been incorporated in the UK with Dutch tax residence and dual share structure since 2005. Under its new proposal, which shareholders will vote on in December, it will move its tax residence from the Netherlands to the UK, adopt a single share structure that will increase the amount of cash it can return to shareholders, and drop “Royal Dutch” from its name and simply be called Shell.

November 21, 2021

Where does gold come from?

Chemical Value Chain

How are chemical elements produced in our Universe? Where do heavy elements like gold and uranium come from? Using computer simulations, a research team from the GSI Helmholtzzentrum für Schwerionenforschung in Darmstadt, shows that the synthesis of heavy elements is typical for certain black holes with orbiting matter accumulations.

Send this to a friend