Mar 13 2007
Univar N.V., a world leader in chemical distribution, today announced that its US subsidiary, Univar USA, has entered into an agreement to acquire 100% of the shares of CHEMCENTRAL Corporation for approximately USD 600 million in cash, including assumed debt.
CHEMCENTRAL, established in 1926, is a privately held company headquartered near Chicago, Illinois, USA. Based on 2006 consolidated revenues of USD 1.4 billion and EBITDA of approximately USD 70 million, the company is one of the leading industrial chemicals distributors in the US, with trading relationships in more than 60 countries.
CHEMCENTRAL is a major distributor of both specialty and commodity chemicals and has distribution centers 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.
On a pro forma basis, combined consolidated revenues for Univar N.V. and CHEMCENTRAL for calendar 2006 would have been approximately USD 8.0 billion, solidifying Univar’s position as a leading worldwide distributor of industrial chemicals. The transaction is expected to be accretive to earnings in the first full year of ownership.
CHEMCENTRAL has a strong customer service orientation and a commitment to leadership on safety, health, and environment issues. The combined company will broaden its product lines and its product knowledge and expertise, while deepening its supplier and customer relationships in several key customer segments such as coatings, household & industrial, and personal care. Therefore, the addition of CHEMCENTRAL’s expertise and product lines in these segments is expected to create significant marketplace synergies for the combined organization.
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. Furthermore, CHEMCENTRAL provides Univar an attractive position in a number of rapidly growing international markets where we are currently underrepresented.”
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. General syndication of the facility will be launched concurrent with this announcement and is expected to be completed by March 30, 2007.
Closing of the CHEMCENTRAL transaction includes customary terms and conditions including nonsolicitation provisions with certain exceptions to comply with the fiduciary duties of CHEMCENTRAL's directors, and is expected to be completed in April 2007. The Closing is conditional upon receipt of certain regulatory approvals, approval by CHEMCENTRAL shareholders and other customary closing conditions.