Azelis IPO to raise US$1B on Belgian stock market

07 Sep 2021 --- Azelis, a service provider for the specialty chemicals and food ingredients industries, has announced its initial public offering (IPO) and intention to list shares on the regulated Euronext Brussels market.

The company targets €880 million (US$1.04 billion) in gross proceeds from the new shares. It hopes these net proceeds, together with borrowings under Azelis’ new credit facilities will strengthen its financial position significantly.

The move will assist in repaying outstanding debt (circa €1.6 billion or US$1.9 billion), while providing the company with increased financial flexibility. The IPO is also expected to support Azelis’ growth strategy and future acquisitions by providing funding and giving it access to capital markets.

“We are focused on being the preeminent global innovation service provider for the specialty chemicals and food ingredients distribution market,” says Hans Joachim Müller, CEO of Azelis. 

“As a public company, we believe we will be able to fully capitalize on growth opportunities, continuing to complement our strong organic growth with accretive acquisitions.” 

More details of the IPO
The IPO is expected to consist of newly created shares from a capital increase, as well as a secondary component from existing shareholders. The IPO will consist of private placements to:

1. Qualified investors in Belgium.
2. Qualified institutional buyers (QIBs) in the US.
3. Certain other qualified and/or institutional investors in the rest of the world.

In addition, Azelis expects that the IPO will support its ability to incentivize the current members of its executive committee and senior management and attract new “high-caliber individuals.”

Azelis is the conduit between over 2,200 specialty chemicals and food ingredient suppliers and over 45,000 customers.Acquisition oriented 
Azelis benefits from consistent organic and acquisition-driven growth and margin expansion, as well as favorable trends such as outsourcing, increasing regulation and consumption growth in the end markets it serves. 

The company reported a 13 percent gross profit CAGR over the period of 2016-2020.

Azelis operates in a highly fragmented industry and complements its strong organic growth with an active acquisition strategy. The company notes that the specialty chemicals and food ingredients distribution market reached €117 billion (US$138.8 billion) in 2019 and the top four companies had a 10 percent market share. 

Azelis forecasts that the industry will further consolidate as its over 2,200 principals (its specialty chemical and food ingredient suppliers) and over 45,000 customers both look to streamline their distributor relationships. 

Acquisitions will enable Azelis to expand its product portfolio and its geographic and product segment market coverage.

The company has already played a significant part in market consolidation among specialty chemicals and food ingredients distributors, having completed 21 acquisitions from January 2018 through June 2021.

In July, Azelis acquired Quimdis in a bid to diversify its presence in France and EMEA. In the same month it also acquired the food distributor MH, expanding its presence in South Korea. 

Ingredient service expertise
Azelis is the second-largest pure-play in the specialty chemicals and food ingredients distribution market, with an approximate 2 percent market share. 

There are three strategic pillars to Azelis’ growth strategy: (i) growth with principals; (ii) growth with customers; and (iii) growth through acquisitions.

In 2020, despite the profound impact of the COVID-19 pandemic on global trade, industrial output and consumer demand, Azelis grew its Adjusted EBITA by 16 percent (including 10 percent organic Adjusted EBITA growth) for the year ended December 31, 2020.

Looking to the future
Azelis’ continued expansion is underpinned by three key strategic drivers: innovation, sustainability and digitalization.

The company has established “the industry’s largest network” of laboratories, with more than 60 application laboratories worldwide.

In July, the Azelis company Megafarma, expanded its presence in the Americas with its first full-service innovation center in Mexico City, featuring five industry-specific application labs for Food, Pharma, Plastics, Personal Care and CASE (coatings, adhesives, sealants, elastomers).

In August, Azelis published its 2020 sustainability report, showcasing its environmental, social and governance commitments. It also recently announced Action 2025, its sustainability strategy. 

Azelis also boasts a “strong digital backbone,” including integrated resource planning systems, global customer relationship management and a master data and analytics hub. It aims to build on tools that are scalable, future-proof, harmonized and highly resilient. 

Azelis’ digitalization program creates significant benefits for its principals and customers. Customers’ portals are being rolled out with 24/7 access to market trends, technical information on products and formulations and real-time online formulation through Azelis’ “e-Lab” in addition to a range of other digital engagement tools. Digitalization is expected to contribute to Azelis’ long-term sustainable organic growth.

Edited by Missy Green