Sector News

Private equity firm EQT to acquire distributor Azelis in secondary buyout

June 20, 2018
Chemical Value Chain

Private equity firm Apax Partners has received a binding offer from another private equity firm, EQT Partners, to acquire leading chemicals distributor Azelis (https://azelis.com/en). EQT and Azelis confirm that Apax has entered exclusive discussions to sell Azelis to the EQT VIII fund and the Public Sector Pension Investment Board, which is acting as co-investor.

The transaction, which is subject to regulatory approvals and other conditions including consultation with employee representatives, is expected to close in the fourth quarter of 2018. Financial terms have not been disclosed but several press reports, quoting people familiar with the situation, say the deal’s enterprise value exceeds €2 billion ($2.3 billion), generating a multiple above 3.5x for Apax.

Apax had been expected to exit Azelis through an initial public offering (IPO) rather than a secondary buyout. Reuters reported in December 2017 that Apax was considering a 2018 stock market listing for Azelis at a valuation of more than €1.3 billion. Analysts say that EQT and other potential private equity buyers are attracted by the current high valuations and growth of other distributors that have gone public in the past 15 years such as Brenntag, Univar, and IMCD. An IPO for Azelis could still follow in the coming years, analysts say.

Apax acquired Azelis—a distributor of specialty chemicals and food ingredients—also in a secondary buyout from private equity firm 3i Group in early 2015. That deal had an estimated enterprise value of €430 million. Azelis says that its sales have more than doubled since 2015 to about €1.8 billion/year and that its EBITDA has tripled. Apax had supported nine acquisitions by Azelis, with the purchase in late 2015 of Koda Distribution Group, which took Azelis into the North American market, the “most significant,” Azelis says.

Apax’s support “has enabled Azelis to expand its global footprint in EMEA, the Americas, and APAC,” says Azelis CEO Hans-Joachim Müller. “[EQT’s] offer represents an opportunity to facilitate our expansion plans and further accelerate growth,” Müller says.

Prior to the Koda acquisition, Azelis’s business was focused mainly on EMEA. Azelis has also built up a presence in Asia. Boston Consulting Group last year ranked Azelis the sixth-biggest distributor in Europe by sales and the fifth-biggest distributor in North America.

EQT says it will “support Azelis’s continued development by providing access to both operational and financial resources and by leveraging EQT’s expertise with buy-and-build strategies. In addition, EQT will provide digital capabilities and grant the company access to a global network of industrial advisors.” Simon Marc, managing director and head of private equity at PSP Investments, says, “Azelis is a global leader in an attractive market and has strong consolidation prospects.”

By Ian Young

Source: Chemical Week

Related News

February 28, 2021

Borealis to invest in new RTO to reduce CO2 emissions at Porvoo polyolefins plant

Chemical Value Chain

This equipment will significantly lower the site’s CO2 emissions, reduce flaring and save around 60 gigawatt hours (GWh) energy each year. Project kick-off is in February 2021, with completion planned for 2023.

February 28, 2021

Grace to acquire Albemarle’s fine chemistry business for $570 million

Chemical Value Chain

The acquisition significantly strengthens and expands Grace’s existing pharma portfolio. Pharma & Consumer is the largest, fastest growing and most profitable subsegment within Grace’s Materials Technologies business.

February 28, 2021

Solvay to carve out soda ash business

Chemical Value Chain

Solvay says it has decided to organize its soda ash and derivatives business into a separate and fully controlled legal structure.

Send this to a friend