Chemicals

The chemical industry is subject to volatile input prices, which affect its margins. The industry is relatively concentrated, and the pressure on margins leads larger companies to constantly reassess their portfolios, prioritising management time and investments. This has provided an opportunity for private equity to support management teams who have been given the chance to buy non-core divisions. As a result, private equity activity has been centred on speciality chemicals and mid-sized firms with differentiated products. These asset-rich chemical companies that need help to meet the challenge of low-cost competition have been a focus for large private equity firms.