Brenntag, a global chemical distribution firm, has signed an agreement to enter into a 65/35 joint venture with Raj Petro Specialities Pvt Ltd, India. The company, headquartered in Mumbai and Chennai, distributes its own-blended brands of petroleum-related products to diverse customer industries in India and other countries in Asia Pacific as well as in Africa and the Middle East.
Brenntag will gain a majority stake of 65% with a first tranche to be closed in April 2018 and the remaining 35% via the second tranche after a period of 5 years, in which the business will be operated as a joint venture, with possible extension of additional 1-2 years.
Steven Holland, CEO Brenntag Group: “For Brenntag, the acquisition of Raj is a further step into the Indian chemical distribution market which is the 7th largest globally for chemicals and 3rd largest for lubricants. Raj’s existing product portfolio and market presence, capability of its infrastructure and strategic locations make it a compelling investment target to expand our footprint not only in India but also in other Asian Pacific countries, in Africa and the Middle East.”
Raj’s portfolio contains own-blended petroleum-related products, servicing a variety of different product groups, namely transformer oils, white oils and paraffins, petroleum jelly, process oils, waxes and solvents as well as industrial and automotive lubes.
Henri Nejade, Member of the Management Board of Brenntag Group and CEO Brenntag Asia Pacific: “Raj has the widest product portfolio among its national competitors and a strong market presence with its own blended brands. Its facilities are strategically placed at the West and Southeast of India, in proximity to major ports, offering blending and repackaging capabilities, as well as a strong application development team. The cooperation offers Brenntag diverse potential for synergies and future growth.”
Seller’s Family Speaker: “We are delighted to partner Brenntag, a global leader in chemical distribution. Through this joint venture Raj Petro can integrate into Brenntag’s global platform of products, suppliers, customers and best in class industry practices and fully leverage on the synergies to emerge as one of the fastest growing specialty petroleum products companies in South Asia.“
The business is expected to generate total sales of approximately EUR 180 million in the financial year 2017/18 ending March 31, 2018. Gross profit 2017/18 is estimated to amount to around EUR 36 million. The business is valued at an Enterprise Value of around EUR 92 million. Closing of the first tranche with 65% is expected at April 1, 2018, subject to contractually agreed closing conditions.
Brenntag has been on an aquisition spree the past two years. In October 2016, Brenntag agreed to acquire the lubricants business of NOCO Inc., headquartered in Tonawanda, New York. NOCO distributes lubricants from ExxonMobil, Petro Canada, Houghton, JAX, and Lubriplate to the Northeast region of the U.S. and parts of Ontario and Southern Quebec.
Also in October 2016, Brenntag signed an agreement to acquire the distribution business of EPChem Group, Singapore. EPChem is a distribution company for special performance chemicals, dedicated to waxes and wax related products for diverse industries and applications mostly in the Asia Pacific region. The acquisition included the Group’s distribution businesses in Indonesia and China.
In September 2016, Brenntag announced it agreed to acquire Mayes County Petroleum Products, Inc., a regional integrated lubricant and fuel distributor headquartered in Pryor, Oklahoma.
In Novermber 2015, Brenntag signed agreements to acquire two leading distributors J.A.M. Distributing Company, LLC, and related entities, headquartered in Houston, Texas, and G.H. Berlin-Windward, headquartered in Manchester, New Hampshire.