Henkel (ETR: HEN3) has offered to acquire Darex Packaging Technologies from GCP Applied Technologies (NYSE: GCP) for $1.05 billion on a cash- and debt-free basis, representing a roughly a 3.5x multiple on the unit’s fiscal 2016 sales figures. Darex, based in Cambridge, MA, supplies sealants and coatings for beverage, food and aerosol cans. Henkel’s adhesive technologies business generated sales of roughly €9 billion (~$9.45 billion) in its 2016 fiscal year.
Henkel’s shares remained virtually unchanged on the news, though GCP’s shares rocketed up 17.7% to close Thursday at $31 apiece.
If the deal goes through, it will be Henkel’s fifth acquisition in chemicals and gases since 2010, according to the PitchBook Platform. But that’s far from first place in this highly specialized space:
1. Arkema (13)
2. Yara (12)
T-3. Swisher Hygiene (11)
T-3. Indorama Ventures (11)
T-5. PPG Industries (9)
T-5. Brenntag (9)
Since 2010, corporate investors have completed 1,112 M&A transactions in chemicals and gases. As a result, some of the top investors have become themselves ripe targets for other acquirers. For a time in 2014, Yara was the object of CF Industries’ (NYSE: CF) acquisitive desires.
Corporate M&A in chemicals & gases since 2010
Deal flow in the past seven years first peaked in 2015 at 194 deals only to repeat the same result the following year. The standout deal of the period has been Merck’s $17 billion hook-up in 2015 with Sigma-Aldrich to form MilliporeSigma in the US and Canada, Merck’s life sciences business. At 32% of all deals, the US represents the preponderance of activity in the industry, with Germany a very distant second at 7%—however, Europe overall accounts for 42% of all deals in chemicals and gases.
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Article by Adam Putz, PitchBook