Dorf Ketal finds a match in Italmatch

Core Viewpoint - Dorf Ketal is in advanced negotiations to acquire Italmatch Chemicals SpA for $1.6 billion, marking its largest acquisition to date and reflecting a consolidation trend in the specialty chemicals industry [14][15]. Company Overview - Dorf Ketal, founded in 1992, is a leading manufacturer and supplier of specialty chemicals, focusing on the hydrocarbons chemicals value chain, including oil and gas exploration, refining, and petrochemicals [14][15]. - The company reported a domestic revenue of ₹5,479 crore in FY24, with revenue for the first half of FY25 reaching ₹2,961.3 crore [14][15]. Acquisition Rationale - The acquisition of Italmatch is aimed at diversifying into adjacent markets and expanding the product and service offerings [5][15]. - Italmatch operates in four key segments: water and oil treatment, lubricants, flame retardants and plastic additives, performance products, and personal care, which aligns with Dorf Ketal's strategic goals [5][15]. Financial Performance - Italmatch reported FY24 revenue of €686 million, with an 8% increase in sales volumes year-over-year. Adjusted EBITDA rose 17% from €115 million to €134 million, and contribution margin increased by 10% to €276 million [8][15]. - Italmatch has maintained a stable EBITDA margin of 20-21% despite challenges in the global chemicals market [10][15]. Strategic Growth - Dorf Ketal has a history of growth through acquisitions, having made at least a dozen since 2003, enhancing its R&D capabilities and product knowledge [7][10]. - The company has expanded its footprint to Latin America, focusing on sustainable chemistries derived from plant-based sources [7][15]. Market Context - The global specialty chemicals market has grown from $1.03 trillion in 2021 to $1.14 trillion in 2023, with projections to reach $1.43 trillion by 2028, driven by demand from various end-use industries [13][15]. - The ongoing challenges in the chemical sector, particularly in Europe, may lead to more favorable pricing for buyers in the current market environment [13][15].