PetChem splashes RM10.5bil to take over Perstorp

PETRONAS Chemicals Group Bhd (PetChem) is buying the entire equity interest in Perstorp Holding AB, a leading sustainability-driven global specialty chemicals company, for RM7 billion (EUR1.53 bil).

The stake was bought from Financière Forêt S.à.r.l, a company under PAI Partners, a European private equity firm, PetChem revealed in a release after market close today.

The acquisition values Perstorp at an enterprise value of EUR2.3 billion which is equivalent to RM10.5 billion.

The acquisition marks the creation of a significant specialty chemicals portfolio, enhancing PetChem’s overall earnings while becoming the preferred chemical company providing innovative customer solutions.

The deal follows PetChem’s acquisition of BRB Group in 2019, a leading global independent producer and formulator of silicones, lube oil additives and chemicals, which launched PetChem into new areas aligned with its long-term growth ambitions.

“This landmark acquisition is a major milestone for PetChem in establishing a key platform to diversify into the specialty chemical industry and capture new growth opportunities, whilst enabling us to future proof our business against market cyclicality and volatility,” said PetChem MD and CEO, Mohd Yusri Mohamed Yusof.

He added Perstorp is a strategic fit for PetChem and enables it to participate in attractive end-markets such as paints & coatings, construction, automotive, personal care and animal nutrition that have a robust growth outlook.

“This acquisition will also provide us with critical talent, know-how, technological platforms and proven customer channels to address the pressing needs of the market for more sustainable solutions,” he added.

Perstorp is a leading niche specialty chemicals player that develops sustainable solutions with focus on the Resins & Coatings, Engineered Fluids and Animal Nutrition markets.

Perstorp has presence in 26 countries including US, Europe and Asia Pacific with seven state-of-the-art manufacturing sites and three research and development centres worldwide.

It has approximately 1,500 employees and serves more than 2,600 customers globally with its 130 product offerings within 30 product groups.

It has global #1 position in several products such as Trimethylolpropane (TMP) and Pentaerythritol (Penta) and regarded among its customers for its product quality and customisation, supply reliability, customer centricity and sustainable products and is recognised for its proprietary oxo and polyol chemistries.

In FY2021, Perstorp recorded approximately EUR1,334 million (RM6,540 million) in revenue and EUR248 mil (RM1.2 bil) in EBITDA with an EBITDA margin of 18.6%.

“We find Perstorp attractive for their expansive range of products, established customer base as well as their market leadership in selected chemicals, which are

complementary to PCG. Perstorp will add up to 2.3 mtpa to PCG’s production capacity and contribute about 28% incremental revenue to PCG based on 2021 results as well as support PCG’s medium-term goal of establishing 30% revenue generated from non-traditional businesses by 2030,” Added Mohd Yusri. –TMR