Private equity firm Apollo to buy distributor Univar

The private equity firm Apollo has agreed to acquire Univar Solutions, the world’s third-largest chemical distributor, for $8.1 billion.

Univar has been in play since late November, when it and the world’s largest chemical distributor, Brenntag, disclosed that they were discussing a possible merger. The firms called off those talks in January, with Univar remarking that it was evaluating “other indications of interest” from possible buyers.

Funds managed by Apollo will pay $36.15 per share for Univar, a premium of about 20% over Univar’s stock price on Nov. 22, before the market became aware of the merger talks.

Engine Capital, an activist investor that owns 1% of Univar’s stock, has been prodding Univar’s management to market the company for sale. However, Engine had been hoping to get a price of between $38 and $44 per share for the firm.

“We are confident this transaction is the right path forward,” says Univar chairman Chris Pappas in the purchase announcement. Univar’s board unanimously approved the sale, which is expected to close during the second half of this year.

As a distributor, Univar attends to many of the details that keeps the chemical industry running. It repackages, blends, warehouses, and transports chemicals for over 100,000 customers. The firm had sales of $11.5 billion and profits of $545 million in 2022. About two thirds of those sales were in the US.

Univar, founded in 1924 as Van Waters & Rogers, has been owned by private equity firms before. Back in 2007, CVC Capital Partners bought Univar, which was then publicly traded, for $2.1 billion. In 2010, Clayton, Dubilier & Rice bought a 42.5% stake in the firm.

When Univar went public again on the New York Stock Exchange in 2015, those two investment firms still held more than 90% of its shares. Apollo was involved with Univar at that time as well, holding an interest of less than 1%. Univar’s largest deal since then was the purchase of rival Nexeo Solutions, the former Ashland chemical distribution business.