Acquisition support - industrial products

Manufacturer of specialist polymer materials seeking to acquire a supplier of high-tech woven polymer and alloy fabrics

• How strong is the target’s competitive position in the supply of a specialist woven polymer used in the chemical industry?

• IAMCO gathered published information on the market and suppliers of technology to it, analysed market data in order to forecast future demand for process technology and the woven polymer at the heart of this technology, and interviewed chemical producers, technology suppliers and industry experts around the world to gain insight into the competitive positions of the various suppliers.

• A very limited number of companies could provide the process technology used in this industry, and a very limited number of companies could produce the woven polymer used in the technology.

• Close relationships existed between some suppliers of process technology and particular suppliers of the woven polymer, while others, including the target, operated independently.

• Most chemical producers sought to spread risk by purchasing the polymer material from a range of suppliers, with or without the recommendation of their process licensor.

• The target was viewed very favourably in terms of the quality of its product and service.

• Demand for the product was forecast to remain strong due to ever growing replacement demand, in addition to a large wave of new build in the short term.

• While some reservations existed with regard to the target’s lack of formal relationship with process licensors, it was believed that its good reputation and the desire amongst customers to maintain more than one supplier would combine to provide a healthy stream of revenue for the foreseeable future. The target was therefore considered to be an attractive candidate for acquisition.