Background and Challenge

The client, a leading global chemical distributor, wanted to expand its chemical distribution business in an emerging market. In order to reach its revenue goal, the client tried to obtain a better understanding of the chemical distribution landscape in this emerging market and considered potential acquisition opportunities.

The client asked L.E.K. Consulting to assist them in better understanding the chemical distribution landscape and to identify potential acquisition targets for inorganic growth.

Approach and Recommendations

We first evaluated the chemical distribution landscape, with focus on a number of key application areas including personal care, paint and coating, pharmaceutical, oil and gas, etc. We prioritized applications for project focus based on supply-demand dynamics and characteristics of the chemical distribution landscape.

We then identified major chemical distributors across prioritized application areas for potential acquisition and established a target company database (long list). We screened the long-list companies and developed a shortlist of companies for detailed profiling.  

Lastly, we interviewed the senior management of all shortlist candidates to build a detailed database and evaluated each company’s potential attractiveness to the client.

Results

The client is aggressively pursuing the high potential acquisition targets.