KODA seeks more M&A after Unipex Canada deal

Interview article by Joseph Chang

NEW YORK (ICIS)–US-based KODA Distribution Group (KDG) will seek to close more deals after its latest acquisition of Unipex Solutions Canada, its chief executive said on Friday.

“This deal is part of our strategy to grow geographically and increase the breadth of products. We wanted to strengthen our presence in the Canadian market and will look for additional acquisitions there,” said Frank Bergonzi, CEO of KDG, in an interview with ICIS.

The company is targeting acquisitions in the pharmaceutical/nutraceutical, oilfield chemicals and agricultural chemicals areas.

However, the next deal to close in the coming weeks will be in lubricants and metal-working fluids and will be rolled up into KDG’s Monson Companies business, said Bergonzi.

KDG closed its buyout of Unipex Solutions Canada in April, bringing KDG’s pro forma annual sales including Unipex to around $750m, he said.

“It’s the seventh largest chemical distributor in Canada, so it’s a sizeable acquisition for us,” said Bergonzi.

Unipex Solutions Canada significantly boosts KDG’s footprint in the country.

KDG acquired The DeWolf Companies in February 2014, which included a small distribution business called Tempo in Canada, focusing on personal care; household, industrial & institutional (HI&I); lubricants; and the CASE (coatings, adhesives, sealants and elastomers) markets.

Headquartered in Montreal, Unipex brings a broad set of products in the CASE, pharmaceutical, personal care and industrial (methanol) markets with 10 locations throughout Canada.

KDG will treat Unipex Solutions Canada as a “completely separate business unit run by the incumbent manager”, noted Bergonzi.

The business will continue to be run by general manager, Jean-Pierre Pelchat.

In the CASE sector, KDG is “fairly well positioned but we could possibly expand further here,” said Bergonzi.

In the overall North American chemical distribution sector, major themes include continuing consolidation and the faster growth of specialty distribution.

KDG’s DeWolf acquisition, of which personal care was a large component, is “performing fabulously with double-digit growth”, noted Bergonzi.

“Suppliers are looking more closely at their channels to market, and migrating smaller account management to specialty chemical distributors such as KDG,” he said.