Deal Capsule Transactions in Chemicals April 2021
“
The Chemical’s deal landscape continued its recovery in the first quarter following 2020’s year-end 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
HIGHLIGHTS — Continued momentum in specialty chemicals drove chemicals M&A activity in Q1 2021 — Primarily due to five deals above the one billion-mark, deal value exceeded prior-year quarter and builds on previous year’s catchup trend.
Trends in Chemicals M&A 1.500
Y-o-Y
233
215 1.000
100
Volume
Value
+14%
+65%
139 84
68
0
17
10
500 1,133
1,151
2015
1,127
1,062
2016 2017 2018 Number of Announced Deals
967 2019
972
236
270
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)
DEAL CAPACITY (Net Debt/EBITDA) HOT
MODERATE 12.7
17.4
31 Mrz 2021 31 Mrz 2022 (b)
Note: Source:
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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