M&A pressure on chems rises as cash balances grow - banker

15 November 2010 21:39  [Source: ICIS news]

NEW YORK (ICIS)--Chemical companies are under increasing pressure to make acquisitions as cash builds on their balance sheets, one investment banker said on Monday.

“The pressure to do deals has become even more acute in the past few months as strategic buyers have generated more cash,” said Telly Zachariades, partner at US-based investment bank The Valence Group.

“However, corporate buyers and private equity firms aren’t running around spending money like drunken sailors – they are being very disciplined,” he added.

Zachariades also noted that chemical companies were looking for “strategically relevant” businesses rather than assets that would take them into new sectors.

He said he expected more chemical deal volumes in 2011 as strategic players seek growth and private equity firms both look to spend money raised in recent funds and sell off assets that have been held for several years.

“Private equity firms are hungry for deals in their more recent funds, and also looking to exit from vintage funds since they were not able to do so during the financial crisis of 2008–2009,” said Zachariades.

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