Univar buys up specialty chemicals provider

Chemcentral, which provides chemicals for the personal care industry as well as coatings, industrial and household chemicals, is based in Chicago, Illinois and had annual revenues of $1.4bn in 2006 derived from trade in 60 countries. The agreement, which is dependent on regulatory consent, will see Univar buy up 100 per cent of the shares in the company, giving it total ownership. The acquisition will help Univar to develop its distribution capabilities for both speciality and commodity chemicals through Chemcentral existing distribution centers located throughout the US, and selected sites in Mexico, Canada, South America, Australia, and the Caribbean, with joint ventures in China, Southeast Asia/South Pacific, India, and the Middle East. With 90 per cent of current revenues focused on its US businesses, the main part of the business will contribute to Univar's existing operations in North America, however its 25 international warehouse locations should provide Univar with added opportunities to expand into international markets, too. The addition of the business should help Univar to push its current global annual turnover up to $8bn, as well as adding a further 1,000 employees to Univar USA's current total of 3,525. Chemcentral has particular expertise and production lines geared up to the personal care industry, including polymers and quartermary compounds, vitamins, actives and UV absorbers, surfactants, emulsifiers, solubilizers and emollients, together with cosmetic pigments and silicones. "Chemcentral brings to our combined organization a diverse customer base in North America with a complementary product set that provides significant opportunities for cross-selling amongst our respective customer bases," said Gary Pruitt, Univar CEO. "Furthermore, it provides Univar an attractive position in a number of rapidly growing international markets where we are currently underrepresented." Univar said that the transaction will be financed by a new $1.5 billion syndicated credit facility underwritten by a number of international finance companies and is expected to be completed by March 30.