The experts within our Chemicals, Plastics and Advanced Materials Industry Group maintain ongoing contact with a wide range of knowledgeable sources to stay abreast of the issues and trends that could impact the industry’s M&A climate or otherwise influence our clients’ businesses. Following are a few of the topics addressed in our most recent Chemicals Industry Review, which is published quarterly.
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CHEMICALS REVIEW (2010: Q2) (View complete report)
Thoughts from the Group
2010 got off to a slow start but M&A activity is improving across the board as we enter the second half of the year. We expect a healthy mix of large cap and middle-market activity with momentum continuing into the end of this year as well as the next.
M&A Market Outlook
As the economic recovery continues, we see increasing levels of activity through all sectors on a global basis. While it may be some time before the exuberance of the pre-recession years return, strategic and financial buyers alike are guardedly optimistic that this year will be better than last. We currently expect 2010 deal volume for the chemical industry estimated to reach $40 - $50 billion in total deal volume. In the lower to middle market, we see several factors behind the increase:
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Stabilizing economy and manufacturing rates are providing better visibility into forecasts,
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Improved financing environment is driving private equity activity,
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Strategic buyers seeking to add product lines and capacity in anticipation of an economic recovery, and
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The change in the capital gains tax in 2011 driving private owners to sell before the end of the calendar year.
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