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Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
Ennovance Chemical M&A
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Ennovance Chemical M&A


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1H-2010 M&A

1H-2010 M&A

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  • 1. M&A Activities: 1H - 2010 <br />Ennovance Capital LLC<br />Specialty PE Firm<br />Operational Focused, Niche Chemical and Related Industries PE Investor<br /><br />BLOG:<br />
  • 2. Statistics: 1H - 2010<br />M&A Deal Activity for Global Chemicals Sector Up 45% in First Half of 2010 Over First Half of 20091<br />Total Deals: <br /><ul><li>Chemicals 788
  • 3. Total Value2$ 83.5 b
  • 4. Average Deal Value (515 deals) $162mm
  • 5. Pharmaceuticals 713
  • 6. Total Value3 $ 78.2 b
  • 7. Average Deal Value (515 deals) $150mm</li></ul><br />Note: 1 Pwc source; 2, 3 Includes all types of deals<br />
  • 8. Chemicals 1H -2010<br /><ul><li> The Deal activity in first half of 2010 went up both in the number of deals and in transaction value compared with the same period in 08’ and 09’
  • 9. Total deals in 2010 788
  • 10. Total deals in 2009 542
  • 11. Total deals in 2008 806
  • 12. Total deals in 2007 336
  • 13. Total deals in 2006 317
  • 14. The value of transaction has almost doubled since 2009 and increased by 2.5 time since 2008
  • 15. The real activity is even higher than data suggests due to the longer process of deal making in the post recession period.</li></ul><br />
  • 16. Deal activity by the number of deals2006-2010, H1<br /><br /><ul><li>The number of deals went up by 117 deals
  • 17. The focus has shifted toward small (under 100 million) and middle size deals (100-500 million)
  • 18. Reason: Due to the economic downturn, the companies are more focused on their core businesses and tend to acquire divestitures rather than whole companies to strengthen their performance
  • 19. The acquisition of the divestitures have a higher proof of success for buyers and sellers</li></li></ul><li>Transaction types in Chemicals<br /><ul><li>Sharp decrease in bankruptcies, BuyBacks
  • 20. The number of IPOs has doubled since 2009 and tripled since 2008
  • 21. A steady increase in Shelf registration across the years
  • 22. As the financial situation improves, we observe many solvent companies willing to exit through IPOs.
  • 23. The increase in IPOs demonstrated the strengthening demand for chemicals from the institutional investors – good news for PE firms.
  • 24. However, due to the existing uncertainty in the current market, many are still waiting for more profitable conditions and complete Shelf registration with the expectation to exit in the next 3 years.</li></ul><br />
  • 25. Transaction types in Pharmaceuticals<br /><ul><li>With the improvement of the economy, only 7 bankruptcies were announced in 2010
  • 26. The number of IPOs, Shelf registrations, and M&A activities stays in line with the numbers from 2008/2009
  • 27. The increase in M&A transaction is expected to become stronger in 2H due to the overall improvement of the economy and easier access to credit
  • 28. A 2009 tend of going private and abandoning the public shares is expected do be slowing down in H2 of 2010 as the financial performance of many improves</li></ul><br />
  • 29. Most Active Sellers (Ultimate Parent) Pharmaceuticals, 1H - 2010<br /># of deals<br />Total Value Sold<br />13,867.68$<br />4,978.14$<br />2989.1$<br /><br />
  • 30. Most Active Sellers (ultimate parent) Chemicals, 1H 2010<br /># of deals<br /><br />
  • 31. Chemical Industry trends and outlook<br />Chemical companies are operating below their capacity<br />Higher M&A activity, increased competition and more deals made by specialty PE firms <br />New or Green Technologies<br />New Opportunity due Regulation and Climate Change<br /> …….<br /> …….<br /><br />
  • 32. Pharmaceuticals: Trends and outlook<br />Strong activity in cross border deals<br />Weak M&A activity in the US and EU in comparison with previous years<br /> A flood of companies “exits” is expected from the PE firms as a result of the PE investments earlier in the decade. <br />…..<br />…..<br /><br />
  • 33. Market for M&A Today:<br />Deal Catalysts:<br />Economic downturn: the existing market conditions offer a wide spectrum of opportunities for M&A in Chemicals<br />Acquire companies thorough potential partnership approach<br />Sellers generate more 13% more profit <br />The acquisition of the divestiture in 57.7% generate positive returns as opposed to 41.7% when buying the whole company<br />Long value chain and complex industry; …creates opportunity for industry experts, deep knowledge with extensive network<br />Environmental risks is a fear for generalist investor <br />Falling stock market works both ways<br />Focus on value instead of a deal price or multiples <br />……..<br /><br />
  • 34. Remarks<br />Due to confidential and proprietary nature, Ennovance Capital published only a few slides. <br />Sources used:<br />Primary market research<br />Secondary data sources includes, but not limited to Capital IQ, Thomson One Banker, VC Experts, and various industry related reports etc.<br /><br />WWW.ENNOVANCE.COM<br />BLOG:<br />Phone: +1 (800) 901-1006<br />