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Second Quarter Chemicals M&A Market Review
Commentary
On this and the following page we provide
statistics regarding transaction activity and
trading levels in the chemicals industry
through the second quarter of 2006. Overall
activity during the quarter was strong,
both in terms of the number of transactions
and deal value.
The largest transaction of the second quarter,
and of the year to date, was announced
on June 22 by Anadarko Petroleum
(NYSE:APC). Anadarko Petroleum offered
$19.1 billion for the take-over of publicly
listed Kerr-McGee (NYSE:KMG), an independent
oil and natural gas exploration and
production company.
M&A Transaction Highlights Q2 2006
BASF AG (DB:BAS) closed its previously
announced acquisition of Engelhard Corporation
for a final value of $5.7 billion. It
represents one of three large acquisitions
BASF completed in the quarter, the other
two being BASF’s acquisition of Degussa
AG’s (DB:DGX) Construction Chemicals
Division for $3.6 billion and BASF’s acquisition
of Johnson Polymer from JohnsonDiversey
Inc. for $478 million.
Other large transactions during the 2nd
quarter 2006 included the acquisition of
Dyno Nobel’s (ASX:DXL) European, Middle
Eastern, African, Asian and Latin American
Business by Orica Ltd. (ASX:ORI), an Australian
manufacturer and supplier of explosives
and mining services, for $685 million.
Date Target Status Buyers/Investors
06/22/2006 Kerr-McGee Corp. (NYSE:KMG) Announced Anadarko Petroleum Corp.
(NYSE:APC)
SOURCE: CapitalIQ, Inc. (division of Standard & Poor’s), public filings
Together with Oranje-Nassau Groep BV
the private equity firm The Carlyle Group
signed an agreement to acquire Stahl International
BV, a Dutch manufacturer of
chemicals and dyes for the processing of
leather, for $667 million. The acquisition is
subject to approval from competition authorities.
“We are optimistic of a
continued strong M&A market
for chemicals in the remainder
of 2006.”
Total Enterprise TEV/
TEV/
Value ($mm) LTM Revenue LTM EBITDA
$ 19,134.5 3.1x 7.1x
06/08/2006 Engelhard Corp. Closed BASF AG (DB:BAS) 5,679.8 1.1x 11.6x
07/03/2006 Degussa AG, Construction Chemicals
Division
05/01/2006 Koor Industries Ltd. (TASE:KOR) Announced Discount Investment Corp. Ltd.
(TASE:DISI)
06/01/2006 Dyno Nobel's European, Middle Eastern,
African, Asian and Latin American Business
05/15/2006 Stahl International BV Announced The Carlyle Group/ Oranje-
Nassau Groep BV
Closed BASF AG (DB:BAS) 3,584.7 1.5x 11.2x
1,253.0 (1) 5.0x 15.0x
Closed Orica Ltd. (ASX:ORI) 685.0 NA NA
667.2 NA NA
06/30/2006 Johnson Polymer Closed BASF AG (DB:BAS) 478.1 1.3x NA
06/20/2006 Huarun Paints Holdings Company Limited Announced Valspar Corp. (NYSE:VAL) 362.5 (2) NA NA
05/01/2006 Emerald Performance Materials LLC Closed Sun Capital Partners 270.0 0.7x NA
06/27/2006 Huntsman Corp., U.S. Butadiene and MTBE
Business
04/25/2006 Sico Inc. (TSX:SIC) Closed Akzo Nobel NV
(ENXTAM:AKZA)
Closed Texas Petrochemicals LP 262.0 0.4x 6.1x
257.4 1.1x 12.4x
(1) Represents the Implied Enterprise Value of Discount Investment Corporation’s agreement to acquire a 35.4% stake in Koor Industries
Ltd. for $443.3 million.
(2) Represents the Implied Enterprise Value of Valspar Corp.’s agreement to acquire an 80.0% stake in Huarun Paints Holdings Company
Limited for $290.0 million.
2 Lincoln International DEALREADER Chemicals Q2 2006