M&A action targets specialty chems - US banker

13 March 2008 22:30  [Source: ICIS news]

NEW YORK (ICIS news)--Chemical industry merger and acquisition (M&A) activity could increase in the specialty chemical sector as large companies go after small and mid-sized businesses, an investment banker said on Thursday.

“Hot areas of deal activity are seen in specialty chemicals such as fine chemicals and personal care ingredients. Valuations have been strong in specialty chemicals as buyer interest remains high,” said Mark Lerner, president of  the investment banking firm Morgen, Evan and Co, based in New York City.

Lerner made his comments at the annual SOCMA (Synthetic Organic Chemical Manufacturers Association) luncheon held at the DCAT Week conference in New York City. The event was hosted by the Drug, Chemical and Associated Technologies Association (DCAT).

Much of the interest in M&A activity is coming from large corporations going after small and mid-sized deals, he said.

“This is especially true of companies based in Japan and Europe who are seeking acquisitions outside their borders,” Lerner said.

M&A remains especially strong in the fine chemicals arena, and the pace is further increasing, the banker said. A large number of assets are out on the market, much of it consisting of plants or operations currently being divested by large pharmaceutical firms.

Also, the outlook among API (active pharmaceutical ingredient) and intermediate contract manufacturers is strengthening overall, he said. As a result, acquisition interest is rising.

By: Feliza Mirasol
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