In the deal, Brenntag will acquire 100 percent of Multisols shares. The transaction will be financed by a combination of available liquidity and additional debt under Brenntags existing financing arrangements. Pending merger approvals, the deal is expected to close in 2011s fourth quarter.
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In a Sept. 2 media presentation, Brenntag emphasized that Multisol, as a supplier of both lubricant additives and base oils, is well positioned to benefit from regulatory changes and the demand for higher performance lubricants.
Whilst lubricant volumes are stable in Western Europe, the tightening of product specifications essentially means a move to better base oils and a much increased use of specialty additives, Brenntag stated. Growth in lubricant volumes is expected in Central and Eastern Europe. The company further noted that Multisol cooperates with key major suppliers of lubricant additives and Group I through Group IV base oils.
According to Multisols web site, it distributes Neste Oils Group III hydrocracked base stocks and polyalphaolefins, Chevrons Group II base oil, Petro-Canadas specialized high performance lubes, Infineums engine oil additives and branded driveline additives, and extreme pressure additives from Arkema, among other products.
Examples of performance fluids and chemical fluids distributed by Multisol include ExxonMobils oxo alcohols and Oxeas specialty esters. Multisols own brand products include alcohol and ketone products and carboxylic acids. It also distributes white oils.
Multisol also fit the bill as an acquisition because it provides mixing and blending services for its customers, and because it has strong and long-term relationships with important suppliers. Lubricant producers are increasingly demanding more technical support, smarter supply chains and more product choice, Brenntag pointed out in the presentation. Lubricant producers are also increasingly looking to outsource the formulation of small volume, higher value, specialty products to those with the technical expertise and flexible mixing and blending capabilities.
Nantwich, U.K.-based Multisol uses in-house facilities to blend, toll manufacture and package custom formulations. The companys operations in the United Kingdom and France serve Western European markets, and operations in Cape Town and Durban, South Africa, supply the markets of sub-Saharan Africa.
The companies anticipate combining sales activities in the United Kingdom, Western Europe, Central and Eastern Europe, and Africa, and cross-selling product portfolios to a wider customer base to aim for continued growth in existing and new markets.
Headquartered in Mulheim an der Ruhr, Germany, Brenntag has 12,000 employees and operates a global network with more than 400 locations in nearly 70 countries. The company provides provides business-to-business distribution solutions for industrial and specialty chemicals, serving 160,000 customers. Products distributed include solvents, acids and alkaline solutions, solids and salts, cleaning and degreasing agents, and chemicals for the treatment of water and sewage.