Deal Capsule Transactions in Chemicals May 2021
“
The Chemical’s deal landscape continued its recovery in the first quarter following 2020’s yearend rally. Evident with some landmark deals, deal activity’s upswing was largely driven by a strong footprint of private equity investors.
CHRISTIAN KLINGBEIL | PARTNER, KPMG IN GERMANY
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HIGHLIGHTS — Continued momentum in specialty chemicals drove chemicals M&A activity in Q1 2021 — Primarily due to four deals above the one billion-mark, deal value exceeded the prioryear quarter and builds on previous year’s catch-up trend.
Trends in Chemicals M&A 1.500
Y-o-Y
233
215 1.000
Volume
Value
+14%
+49%
139
100
84
68 10
15
236
270
500 1.133 0
1.151
2015
1.127
1.062
967
2016 2017 2018 Number of Announced Deals
2019
972
2020 Q1 2020 Deal Value in US$ bn.
Q1 2021
Subsector public EBITDA multiples(a) Specialty chemicals
— Chemical valuations have rebounded after a sharp drop at the beginning of the pandemic, demonstrating a steady increase over the past quarters.
13.1x
12.2x
Base & petrochemicals
Distributors & others
10.8x
9.8x
33.4x 7.8x
Q4 2020
Q1 2021
Q4 2020
Q1 2021
Q4 2020
Q1 2021
Deal Thermometer Q1 2021 — KPMG’s Deal Thermometer signals recovery tendencies for M&A activities in chemicals. — Significantly growing deal appetite along with slightly strengthened financing position due to lower debt levels shapes the current deal environment.
DEAL APPETITE (Forward P/E ratio)
HOT
MODERATE 12,7
17,4
31 Mar 2021 31 Mar 2022 (b)
Note: Source:
DEAL CAPACITY (Net Debt/EBITDA)
1,3x
1,1x
31 Mar 2021 31 Mar 2022(c) COOL
(a) Refers to 90% quantile at respective quarter-end (b) Forward P/E ratio: net profit expected for 2022 to market cap in 2021 (c) Deal capacity: expected net debt to EBITDA in 2022 Thomson One, Capital IQ, KPMG Germany Analysis
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