Why are specialty surfactants so special?
NEIL BURNS
Neil A. Burns LLC
Member of H&PC Today Scientific Advisory Board
I have consulted periodically to the chemical industry since 1988 and throughout that over quarter-century, I have been asked regularly the question "what is a specialty chemical"? I still get, admittedly only occasional, laughs when I relate to boards and CEO's that a specialty business is one you have just acquired and a commodity business is one you have just divested. However, it is rare indeed to find a company boasting of its aggressive investment in commodity chemicals and its strategy to get away from involvement in specialties. No-one does that. Why not?
It's all about the money. Any investment banker will tell you that a specialty chemicals business is worth more, per dollar of earnings than a commodity businesses. That means, using the common metric of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) multiple, an acquirer of a chemical business will pay around a one third or more higher multiple if said business is fortunate enough to have been granted the appellation "specialty" by the financial community. The table below using da ... ...