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September 19 2018, David R Brown

Chemical distributor Univar to buy Nexeo in USD 2 billion transaction

Global chemical and ingredient distributor, Univar Inc. (NYSE: UNVR) and Nexeo Solutions, Inc. (NASDAQ: NXEO), a leading global chemicals and plastics distributor, have entered into a definitive agreement for Univar to acquire Nexeo in a transaction valued at approximately USD 2.0 billion, including debt and other obligations (USD 1.05 billion cash-and-stock). The combined business will have revenues of around USD 12 billion prior to any future divestments.

This transformational combination is designed to create the premier global chemical and ingredients distributor

David Jukes, President and CEO of Univar

Univar said the Nexeo transaction would add to its earnings and cash flow in the first full year and generate USD 100 million of annual cost savings by the third year following the deal, expected to close in the first half of 2019, subject to shareholder and regulatory approvals.

Univar's president and CEO, David Jukes, said: “This transformational combination is designed to create the premier global chemical and ingredients distributor, with exciting opportunities for our customers, suppliers, employees and investors. Together, we will drive growth and shareholder value with the largest North American sales force in chemical and ingredients distribution, the broadest product offering, and most efficient supply chain network in the industry.”

Nexeo's CEO, David Bradley, added: “We share Univar's confidence in the future of our combined enterprise, given the strong strategic alignment across our business models, go-to-market strategies, superior product offerings, and digital capabilities. This combination represents a logical and compelling step forward, consistent with our focus on accelerating growth for the benefit of our customers, employees and suppliers”.

Consistent with its focus on chemicals and ingredients distribution, Univar has hired an external advisor to evaluate strategic alternatives for Nexeo's industry leading Plastics business, which may include a potential divestiture. Nexeo's Plastics business is a distributor of prime thermoplastic resins and other products supporting OEMs, molders and design firms around the world, and accounted for half of Nexeo’s total revenue in 2017.

Goldman Sachs and Co is Univar’s financial adviser, while Moelis & Co is advising Nexeo.

About Univar
Founded in 1924, Univar is a global chemical and ingredient distributor and provider of value-added services, working with leading suppliers worldwide. Supported by a comprehensive team of sales and technical professionals with deep specialty and market expertise, Univar operates hundreds of distribution facilities throughout North America, Western Europe, Asia-Pacific and Latin America. In 2017, Univar reported revenues of USD 8.25 million and had nearly 9,000 employees located in 31 countries.

Source(s): Univar Press Release

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