Friday, 6 November 2009

Brenntag ipo could stir up chemical distribution merger activity

BC Partners' impending initial public offering of German chemical distribution group, Brenntag, could excite further merger and acquisition (m&a) activity across this sector. Azelis, IMCD and Univar could all be sold or IPO'd by their private equity owners if the Brenntag deal is successful.

But this is a big "if". Owners BC Partners have a big job on their hands repackaging the debt used to fund the Brenntag acquisition to make the group saleable. And the capital markets may not yet be ready for a E1.5bn floatation.

Brenntag is in surprisingly good financial shape for a company operating in commodity chemicals during this downturn so BC Partners' decision to IPO may make sense.

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