Univar Solutions claims three-year “transformation” has paid off and Apollo deal is the “right path forward”

16 Mar 2023 --- It’s “business as usual” at Univar Solutions as the dust settles following this week’s announcement that Apollo Funds plans to acquire the chemical and ingredients distributor for US$8.1 billion.

It’s too early to say who Apollo – which describes itself as a high-growth alternative asset manager – may have lined up for Univar Solutions.

And also what taking the company private will mean. 

Despite requests for more information, Univar Solutions is being guarded on further details at this stage. 

In a statement sent to FoodIngredientsFirst, Dwayne Roark, vice president for public affairs, government relations and communications, says: “The transaction is expected to close in the second half of 2023, subject to customary closing conditions, including approval by Univar Solutions shareholders and receipt of regulatory approvals. Until then, it is business as usual.” 

The Board’s decision follows a comprehensive review of value creation opportunities for Univar Solutions – first announced last year. 

New York-based financial advisor, Engine Capital, sent a letter to the Board of Directors of Univar in November, claiming the company needed to initiate a formal review of strategic alternatives.

Later that month, Brenntag confirmed the possibilities of a deal in global chemical distribution after it held preliminary discussions with Univar Solutions over a potential acquisition.

The transaction is expected to close in the second half of 2023However, those talks broke down and by January this year, Brenntag had officially pulled out, leaving Univar to focus on other “indications of interest.”

That interest came to fruition on Tuesday when Apollo stepped in. 

Univar Solutions’ Board of Directors stresses how confident this pending deal with Apollo — which indicates that shareholders of Univar Solutions will receive US$36.15 per share in cash — is “the right path forward” and maximizes value for Univar Solutions investors.

Acquisition and expansions
Univar Solutions has been demonstrating lately its strategy to grow its Ingredients and Specialties business with a series of acquisitions, developments and partnerships.

Just last week, Leprino Foods Company chose Univar Solutions as an authorized distributor of nutritional ingredients and dairy products, including lactose, sweet whey, whey protein concentrate and isolate micellar casein and milk fat globule membrane in the US and Canada.

Also last week, Univar Solutions’ Nutraceuticals launched a campaign for its Wellness Academy entitled “Healthy aging and living well with nutraceutical ingredients.” The move comes in light of the United Nations General Assembly’s declaration that it would be the decade of healthy aging.Univar Solutions has been demonstrating lately its strategy to grow its Ingredients and Specialties business with a series of acquisitions, developments, and partnerships.

In the personal care market, Univar Solutions is to acquire leading Turkish specialty chemicals distributor Kale Kimya which has an extensive product portfolio of beauty and personal care products and home and industrial cleaning products, including surfactants, actives, emulsifiers, preservatives, UV filters, fragrances, polymers, conditioners, esters, and emollients.

Last month, Univar Solutions reported its 2022 fourth-quarter and full-year financial results and issued guidance for 2023. The company reported net sales of US$2.6 billion, an increase of 3.8% on a reported basis and 6.9% on a constant currency basis compared to the prior-year fourth quarter.

“In 2022, our organization reached high-water marks in our financial results, customer satisfaction, employee engagement, and safety,” David Jukes, president and CEO, said at the time. We believe our operating agility and deep industry expertise, coupled with our service model that puts the customer at the center of all we do, is driving outstanding results.” 

Who is the Abu Dhabi Investment Authority?
The transaction includes a minority investment in a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA). This is a sovereign wealth fund owned by the Emirate of Abu Dhabi and founded to invest funds on behalf of the Emirate of Abu Dhabi government.

ADIA’s portfolio comprises over two dozen asset classes and subcategories, from equities and fixed income to hedge funds, real estate, private equity and infrastructure.

Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to ADIA, which has just signed an agreement for a US$500 million investment with Indian eyewear start-up Lenskart Solutions Pvt. 

By Gaynor Selby