Industry Overview
Industry Drivers
Sustainability – Discussions surrounding sustainability have been increasingly relevant in the economy, leading to changes in consumer demands and government regulations. Chemical manufacturing companies must find ways to adapt to these changes, which might involve reducing plastics use, decarbonizing production, etc.
Customer centricity – Companies are staying competitive by attempting to meet costumer’s every need and improve their experiences.
Technological innovations – In an increasingly digitized economy, industries are taking advantage of technological tools, and the chemical manufacturing industry is no exception. However, untapped potential remains in this industry, and integration of technology and data analytics into the supply chain – from distribution to production – can be expected.
Selling a Chemical Manufacturing Company
Companies in the chemicals industry find themselves at the center of scientific innovation, and as such, there are a few unique characteristics of this industry that must be considered when selling a chemical company. As Canada’s leading private market M&A Advisory firm, Beacon understands that selling a business is an important decision. A dedicated business owner not only seeks to extract maximum value from the sale of a business but also seeks to sell the business to a competent buyer who can continue the company’s legacy. Beacon has worked on valuation and M&A advisory mandates in the chemical manufacturing industry, bringing extensive experience in deal negotiation to the table. Our experienced advisory team will assist your business in navigating the entire sell-side M&A process.
Capital intensity: This industry is generally capital intensive for a number of possible reasons, including product storage, machinery, and laboratory equipment.
High barrier to entry and low/moderate competition: Multiple entry barriers, including capital requirements, economies of scale, reliance on established supplier relationships, etc., have effectively reduced the size of competition that companies in this industry face.
Government regulations: all companies in the chemical industry are subject to government regulations due to the hazardous nature of chemical products.
Dependency on macroeconomic factors: the financial performance of chemical companies can be impacted by the oil and gas price, the Canadian effective exchange rate, and overall economy performance. Oil and gas prices have a direct impact on operational overhead costs and profit margins, whereas Canadian dollar value dictates the price competitiveness of Canadian goods. Lastly, a strong economy drives consumer demand for chemical products used for residential purposes.
With 140 years of combined experience serving businesses within Toronto, Ontario, and abroad, the Beacon transaction team has extensive knowledge and experience successfully working for several business service companies from a variety of industries. Whether it be a valuation or sale, our team can provide expertise and resources found only at larger corporations, paired with the personalized touch of our M&A Advisory team. Contact us today to get in touch with one of our advisors.
