- Organic chemical manufacturing
- Inorganic chemical manufacturing
- Petro-chemical products manufacturing
- Plastics and resins manufacturing
- Dyes and paints manufacturing
- Container manufacturing
- Textile mills
- Oils and coatings
- Soap & cleaning compounds manufacturing
- Distributors and wholesalers for all items listed above
Beacon has advised several businesses in the chemicals industry.
Beacon was engaged by manufacturer and wholesaler of specialty chemicals and cleaning compounds which had a 30-year history. As a niche business with over 150 products in its product line, the business had developed a loyal client base, thereby generating steady and recurring revenue. The owners, at the time, were seeking an exit due to retirement. Due to Beacon’s strong outreach across North America, Beacon was chosen as the exclusive broker and provided sell-side transaction advisory services through the entire sale process.
Beacon began by compiling a fairness opinion to determine the business’ true fair market value and proceeded to compile deliverables and confidentially market the mandate to potential buyers. Being a specialized business with a niche product offering, finding an acquirer who had a complementary portfolio of products was particularly challenging. Through our large network of buyers and industry professionals, we were able to successfully attract the right buyers for the business. Based on the seller’s criteria and vision, as well as our financial acumen, we were able to pre-screen buyers and solicit offers from serious buyers.
Beacon’s team assisted our client through every step of the sale process, and successfully completed a tuck-in acquisition. Beacon effectively negotiated a deal with Orapi Group, a leading French manufacturer of professional hygiene products. Our client’s existing portfolio and distribution channels offered the perfect synergistic fit for Orapi Group. Our team advised the seller through the buyer due diligence process, ensuring transparency between both parties. Beacon negotiated an all-cash asset transaction with a six-month training and transition period. Beacon’s involvement through the succession planning and transition phase ensured that existing client relationships were preserved through the sale process.
This industry includes all manufacturers, distributors and retailers of organic and inorganic chemicals, polymers, petrochemicals, dyes, paints, pigments and related industries. The industry is highly diversified with multiple sub-industries, each of which acts as a supplier or customer for the other to form an interconnected web. Primary suppliers include oil & gas manufacturers and refineries, mineral mining companies, laboratory equipment suppliers and plant equipment, manufacturers. The industry is currently in its mature phase. All chemical industries are heavily regulated due to hazardous and toxic materials which require adequate health and safety measures. The organic chemicals industry has high barriers to entry while inorganic and petrochemical industries are slightly easier to break into. The chemicals industry is overall capital intense and is characterized by low to moderate competition due to multiple entry barriers. The industry depends on oil and gas prices, the Canadian effective exchange rate. Low oil & gas prices reduce operational overhead and increase profit margins. A weaker Canadian dollar makes Canadian goods more competitive. Household spending drives demand for chemical products used for residential purposes such as cleaning compounds and paints. On the other hand, demand for industrial chemicals depends on economic growth, interest rates, and macroeconomic factors affecting corporate profits.