Chem distribution M&A to grow in new Europe

04 June 2008 12:49  [Source: ICIS news]

BUDAPEST (ICIS news)--The next year should see a real pick-up in chemical distribution mergers and acquisitions (M&A) in central and eastern Europe (CEE), an investment banker said on Wednesday.

With chemical distribution still in its infancy in the region, there were substantial M&A opportunities, particularly for private equity involvement, said Anton Janes, head of corporate finance CEE for Austrian investment bank Sal Oppenheim & Cie (Osterreich), on the sidelines of the European Association of Chemicals Distributors (FECC) conference here.

"I have a vision for local entrepreneurs and smaller private equity firms to accumulate assets in local markets and then cash in by selling to large players,” he added.

The trends seen in western European distribution M&A were likely to take place in central and eastern Europe with a time lag, Janes said.

 

Lower margins and reduced profitability would result in a stronger focus on cost reduction and improved efficiencies, fuelling further consolidation, he said.

Private equity players would grow companies into new product ranges and geographies, he said, adding this could take place through "buy and build" (organic growth) plus bolt-on acquisitions, he added.

"Early movers still have good chances to accumulate distribution assets, maybe in several markets, and to exit via sale to western sector players," Janes said.

 

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By: Will Beacham
+44 20 8652 3214



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