Buying a specialty chemical distribution company is a critical project as it is important to have a good match between the principals of the seller and the buyers principals. A specialty distribution company is asset light so you normally pay mostly goodwill for the acquisition. Especially when a distribution company has good margins and is very profitable. As a medium sized specialty chemical distribution company you have to grow to be able to compete against the larger players in the industry. Growing via acquisitions and buying distribution companies in other countries where you are not active yet can be a good strategy. However, due to the diversity of the industry you have to have good local contacts to be able to buy the right distribution company.
Involve us in buying your specialty chemical distribution business
To achieve several objectives M&A can give you a head start. For example if you want to expand outside the borders of your own country. When you purchase an existing company you are immediately in business (compared to starting it from scratch) Other motives for buying a business are;
The CFIE advisor can provide you with detailed insights into these elements.
Firstly, it is important to describe exactly what type of distribution company you want to buy. We need to know which size, location principals industries serviced and type of products you are after. The next step is to get in contact with the right targets. We can help you here as we have a large network of business owners that are open for a sale. It is important to check the human side and see if the there is a cultural fit between the two companies. Especially the cultural differences between people living in different countries can be large.
What matters most when buying a distribution company is to make sure you are talking to a distribution company that has the right profile and is suited for you. The profile of the business owner of a distribution company is crucial as this person has a lot of direct contact with clients and he is the face of the company. There might also be conflicts between the principals of the seller and the buyer. Further, we suggest to check the valuation expectations of a seller early on in the process as we see different valuation demands. Mostly the demands of a business owner are above actual market valuations we see happening. You should definitely get legal and tax advice during the process of a distribution business purchase. The contracts (SPA and or LOI) are a crucial part of the transaction and these should be well drafted. Roughly the main steps are;
Learn more about the process of buying a business.
The (specialty) distribution segment is a part of the chemicals industry that the CFIE team knows well. When buying a specialty chemical distribution our scope goes outside of the European boundaries. We have contacts with several global distribution business owners which are open for a sale. If you have serious plans for acquiring a company in specialty chemical distribution please visit the section chemicals companies for sale. Maybe there are already companies for sale in our network that fit your requirements. We can also make an anonymous buy side profile for you free of charge and you will be informed if suited opportunities come up.
The team of Corporate Finance in Europe has large experience in chemicals and has a team on the ground to help with business sales and purchases in chemicals. Our people have decades of chemicals experience themselves and are able to help with buying and selling chemical companies.
Feel free to contact us for information about buying a business in specialty chemical distribution. We know your industry and speak your language. We know the business owners that are considering selling a business and the ones that are already actively on the market open for a sale. The advisors of CFIE are here to help you to get the deal done when purchasing a specialty chemical distribution company.