September 28 (SeeNews) - French-based specialty chemicals distributor Safic-Alcan would consider investment opportunities of up to 50 million euro ($55.9 million) in Southeast Europe (SEE), a region that provides significant growth opportunities, the CEO of the French firm said.
“The company is looking to grow in the SEE region through acquisitions or joint ventures and we are looking for businesses we can build on,” Martial Lecat told SeeNews in an emailed interview.
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As part of Safic-Alcan's strategy to expand its footprint in developing businesses in Eastern Europe – and ultimately reach its strategic objective of setting foot on all markets on the continent, the company acquired in August the distribution business of Bulgaria's Chimsnab.
“We see continued growth opportunities in all Eastern and Southeast European countries across the board. Also, having pan-European agreements with our suppliers, we are committed to be there. As a matter of fact, most of our competitors are present in the region so Safic-Alcan cannot remain on the sidelines,” Lecat said.
BULGARIAN DEAL A UNIQUE OPPORTUNITY
With the Chimsnab deal, Safic-Alcan took advantage of a unique opportunity to take over a distribution business that was already very active, had 900 customers, efficient sales and marketing teams with sufficient local coverage, a broad complementary product offering, efficient logistics and warehouses, the official said.
“We had a strategic objective to expand to Bulgaria in order to optimize our marketing and sales channels locally. We want to have a pan-European coverage and a local presence. We happened to be there at the right time.”
The acquired distribution business in Bulgaria, which is focused on high-quality polymer compounds and specialty chemicals, will be used as a sourcing platform to further enlarge the product range of Safic-Alcan with some selected polymers and high performance compounds allowing it to serve most of its customers in SEE.
The Bulgarian operations include two regional offices - in Sofia and in Ruse, strategically located on the Romanian border and near Serbia. The office in Ruse will also be used as a regional logistics hub.
In 2014, the revenues of the acquired Bulgarian operation reached approximately 9 million euro covering a range of products, from coatings and industrials to food and beverage, to life science and ethylene propylene diene monomer flooring.
The Chimsnab deal was not Safic-Alcan's first business foray into Eastern Europe. In 2006, the French firm took over Hubron, a distributor in the Czech Republic. In 2007, the company opened subsidiaries in Poland and Romania and, more recently, in Ukraine in 2013 and in Serbia in 2014.
ANNUAL GROWTH OF 10% TARGETED FOR BULGARIAN OPERATION
Safic-Alcan's approach to the Chimsnab deal was market oriented with the company not only looking to identify a suitable target with willing sellers, but also keen to determine how a potential deal with a Bulgarian distributor would impact its business as a whole.
“Chimsnab was finally selected because the company differentiated itself as major player in its field of expertise with an excellent reputation, good track record in quality products, and highly qualified teams while capturing synergies and saving us further investments in marketing or logistics,” Lecat said.
In Bulgaria, Safic-Alcan plans to invest in the development of its core business - specialty chemical products - where it sees important growth opportunities along with businesses where Chimsnab is absent such as rubber and pharmaceuticals. The company expects growth of up to 10% a year and has already planned to hire additional employees.
The French group, which develops and provides a large range of polymers, materials and additives for the rubber, coatings, pharmaceuticals and cosmetics industries, posted nearly 403 million euro of revenues in 2014.
($=0.8949 euro)