Brenntag Buys US Distributor, CEO to Retire 2020
Leading chemical distributor Brenntag has acquired New England Resins & Pigments (NERP) based in Woburn, Massachusetts, USA. The transaction’s financial terms were not disclosed.
NERP, which had sales of $28.6 million in fiscal 2018, mainly supplies the coatings and construction, adhesives and other specialty industries. Its portfolio includes color pigments, functional minerals and resins, and additives. The company operates a warehouse and its own truck fleet.
Anthony Gerace, Brenntag Group’s managing director mergers & acquisitions, commented: “NERP allows us to expand our regional specialty chemical portfolio and bolsters Brenntag’s existing material science business and technical sales presence in New England and the border states. It also strengthens our distribution footprint and facilitates new and stronger relationships with our specialty chemical partners.”
In separate news, Brenntag CEO Steve Holland has announced he will retire early next year having decided not to renew his contract when it expires in February 2020. He commented: “2020 is the start of a new decade and I believe it’s the right time for new leadership to take Brenntag forward into new areas of growth and success.”
Holland has led the German group since June 2011. He was previously managing director of Albion Chemicals in the UK, which Brenntag acquired in June 2006.
His announcement came at the same time that Brenntag announced record operating earnings for 2018 of €875.5 million, up 8.4% on a constant currency basis. Sales rose 10.2% (constant currency basis) year on year to reach nearly €12.6 billion with gross operating profit up 7.5% to more than €2.6 billion.
Holland said all regions contributed to the growth, with North America particularly seeing a strong rise in earnings.
He is cautious in his outlook for 2019, pointing to a weak start to the year, notably in Europe. Holland anticipates that business overall will remain flat in the first half of 2019 but then strengthen in the second half. Brenntag is forecasting EBITDA growth of between 3% and 7% in 2019.
With regard to further acquisitions, the CEO said he expects to announce another transaction by the end of this quarter. He added: “We have an active pipeline and a number of deals will be announced during the course of this year.”
During 2018, Brenntag made six acquisitions with a total enterprise value of roughly €265 million, along with one divestment, notably the sale of its Biosector business to Croda for €72 million. Holland noted that the purchase of Africa’s Desbro Group, which Brenntag announced last September, is expected to close in the second quarter of 2019, later than originally anticipated.