Deal Capsule Transactions in Chemicals November 2021
“
Chemicals deal landscape brought about a fresh tide of optimism in 2021. Divestments, sustainable solutions and consolidation emerged as key topics, driven by the streamlining of global operations, recovery of end-markets, and held up investor capital.
”
CHRISTIAN KLINGBEIL | PARTNER, KPMG IN GERMANY
HIGHLIGHTS
Trends in Chemicals M&A 1.500
— M&A activity in Q1-Q3 2021 was driven by continuous momentum from the specialty chemicals subsector. — Further advancing deal activity in specialty chemicals was mainly driven by higher margins and the recovery of end markets notably in automotive and manufacturing.
Y-o-Y
233
215 1.000
Volume
Value
+27%
+31%
43
57
703
893
139
100
84
68
500 1,133 0
2015
1,151
1,127
1,062
967
2016
2017
2018
2019
Number of Announced Deals
979
2020 Q1-Q3 2020 Deal Value in US$ bn.
Q1-Q3 2021
Subsector public EBITDA multiples(a) Specialty chemicals
— Even though chemical valuations have increased on an annual basis, the Q3 comparison shows a dip, indicating a slight market correction and a stabilization effect following the sharp rebound in the beginning of 2021.
11.9x
11.9x
Q2 2021
Q3 2021
Base & petrochemicals
Distributors & others 14.4x
10.1x
9.6x
Q2 2021
Q3 2021
7.1x
Q2 2021
Q3 2021
Deal Thermometer Q1-Q3 2021 — KPMG’s Deal Thermometer signals a stabilization at the current level for M&A activities in chemicals. — Slightly declining levels of deal appetite coupled with stagnant level of debt shape the current deal environment.
DEAL APPETITE (Forward P/E ratio)
DEAL CAPACITY (Net Debt/EBITDA) HOT
MODERATE 18.8
15.7
30 Sep 2021 30 Sep 2022(b)
Note: Source:
0.9x
0.9x
30 Sep 2021 30 Sep 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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