Private chemical buyout transactions

Our own analysis of public-to-private chemical buyout transactions conducted between 1986 and 2004 shows this in impressive fashion (Fig. 30.4). Only a third of total deals conducted have reached any exit, and about 20 percent of the companies acquired between 1991 and 1995 are still owned by their financial investors. 

In the mid 1990s, buyout firms began to conduct leveraged transactions in the chemical industry. A slew of multi-billion dollar LBOs suggest the trend has intensified since the start of the new millennium. This chapter explores the relevance of private equity investors for the chemical sector and describes the value generation levers they apply it examines what traditional chemical corporations can learn from their financial competitors and concludes with a description of buyout firms challenges in the chemical industry and an outlook. 

Buyout firms, in turn, are keen to conduct transactions as they face pressure to employ the money raised from investors in recent years. According to estimates, the private equity industry as a whole raised USD 900 billion between 1998 and 2003 (3i/PwC 2000 to 2004). However, the industry has invested only about USD 800 billion, leading to a capital overhang of around USD 100 billion by 2003. Part of this immense capital wave is flooding into the chemical sector. European markets in particular are profiting from the capital inflow as many large and experienced US buyout firms have started only recently to build up resources in Europe in order to prepare for high profile LBOs (Lemer, J. et al. Dixit, A. Jayaraman, N.). 

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See also in sourсe #XX -- [ , ]

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