Late Brenntag bid fails to prevent Univar acquiring Chemcentral
Rotterdam, The Netherlands – March 2007
Univar acquire Chemcentral, the 4th largest US chemical distributor, for $650M.
Univar N.V. has announced that its US subsidiary, Univar USA, has entered into a revised agreement to acquire 100% of the shares of Chemcentral Corporation, the 4th largest US chemical distributor, for approximately $650 million.
Univar had originally announced they had purchased Chemcentral on March 12, 2007 for $600m but the deal looked suddenly in doubt when on, March 19, 2007 Brenntag Holding GmbH launched a late counter bid of $700M.
Chemcentral could have ended the merger agreement with Univar, subject to $22 million termination fee, but last minute negotiations resulted in Univar offering an additional $50M subject to Chemcentral discontinuing further discussions with Brenntag. In a separate agreement, certain senior officers and the Board of Directors of Chemcentral committed to vote their shares in favour of a merger with Univar and against other proposals.
Chemcentral, established in 1926, is a privately held company headquartered near Chicago,Illinois, USA. and one of the leading industrial chemical distributors in the US, with trading relationships in more than 60 countries. The company has distribution centres located throughout the US, and selected sites in Mexico, Canada, South America, Australia, and the Caribbean, with joint ventures in China, Southeast Asia/South Pacific, India, and the Middle East.
Its sales are derived primarily from its North America operations, with over 90% of 2006 revenues attributable to its US business. Chemcentral operates 45 stocking locations and 4 regional centers in North America, with another 25 international warehouse locations, and has approximately 1000 employees.
The acquisition of Chemcentral will further extend Univar’s position as the No.1 chemical distributor in the US as well as strengthening Univar’s presence in a number of rapidly growing international markets where they are currently under-represented including Asia, Australia and Central/South America.
Commenting on the acquisition, Gary Pruitt, Univar CEO, said, “We are very excited by the prospect of joining forces with Chemcentral. It is a quality organization in every respect. We look forward to adding their depth of talent to the Univar family.” He added, “Chemcentral brings to our combined organization a diverse customer base in North America with a complementary product set that provides significant opportunities for cross-selling amongst our respective customer bases.”
John Yanney, President and CEO of Chemcentral, said, “This is a smart, strategic acquisition by Univar that delivers attractive value to Chemcentral’s shareholders. The union of our companies also will bring important benefits for our customers and suppliers, as well as create new professional opportunities for many Chemcentral employees in a larger organization with a culture similar to our own. As our industry becomes increasingly global, merging with Univar provides exciting prospects for continued growth and development in important markets around the world.”
The transaction will be financed by a new USD 1.5 billion syndicated credit facility underwritten by ABN AMRO N.V., Bank of America Securities Limited and Citigroup Global Markets Limited. The deal is subject to US merger closure which is expected to be received by April 2007.
Chemcentral reported consolidated revenues of $1.4bn and EBITDA of some $70m last year. In 2006, Univar USA generated net sales of USD 3.26 billion and operating income (EBIT) of USD 128 million. On a pro forma basis, combined consolidated revenues for Univar N.V. and Chemcentral for 2006 would have been approximately USD 8.0 billion, solidifying Univar’s position as a leading worldwide distributor of industrial chemicals.
About Univar
Univar N.V. (Euronext Amsterdam: UNIVR) is one of the world’s leading independent distributors of industrial chemicals and providers of related specialty services, operating throughout North America and Europe. Univar endeavors to service its customer base, made up of some 250,000 industrial customers, with a full portfolio of products. Univar operates a network of 160 distribution centers, located throughout the United States, Canada and 18 European countries.
In 2006, Univar generated net sales of USD 6.6 billion and operating income (EBIT) of USD 238.6 million. Univar has approximately 6,900 employees based throughout North America and Europe. The company’s registered office is in Rotterdam, the Netherlands, with administrative support offices in Bellevue, Washington, USA, and Bradford, England, UK.
For more information about the Univar visit their web site at www.univarcorp.com. Chemcentral's web site is www.chemcentral.com
About Chemagility
Chemagility is an information services and marketing services company specializing in chemical related-markets.