The global sustainable chemical company, Indorama Ventures (IVL) completed its acquisition of Brazil-based Oxiteno S.A. Indústria e Comércio, becoming a leading global supplier in high-value surfactant markets.

The acquisition of Oxiteno, formerly a subsidiary of Ultrapar Participações S.A., was announced in August 2021 and is effective from 1 April 2022 after the transaction was approved by Brazil’s Administrative Council for Economic Defense (CADE). Through the acquisition, IVL extends its growth profile into highly attractive markets in Latin America and the U.S., becoming the leading surfactants producer in the Americas, with additional potential to expand in Europe and Asia.

D K Agarwal, IVL’s CEO, said, “This strategic acquisition is aligned to our Vision 2030 of growing our industry leadership in sustainability and our continued goal to double our EBITDA every five years. Based on our experience of completing some 50 acquisitions in 20 years, the quality of Oxiteno’s people and our shared values were important considerations. Oxiteno brings an excellent management team, strong customer relationships in Brazil, Uruguay and Mexico, expertise in sustainability innovation, and a strong ESG/sustainability program. We welcome our new IVL family members and look forward to fulfilling our purpose of ‘reimagining chemistry together to create a better world’.”

Oxiteno becomes part of IVL’s Integrated Oxides and Derivatives (IOD) business segment, which IVL formed in 2020 with the purchase of assets from U.S.-based Huntsman (Spindletop transaction). IOD is a high-margin growth driver alongside IVL’s traditional Combined PET (CPET) necessities segment and its Fibers segment. Together, IVL’s three segments create a stronger and more resilient integrated platform along the company’s petrochemicals value chain.

The Oxiteno acquisition includes 11 manufacturing plants in Latin America and the U.S., 5 R&D centers, an experienced management team, a strong environmental governance record, and expertise in green chemistry innovation. Through Oxiteno, IOD assumes a leading position in technologies catering to innovation-led, high-value-add (HVA) surfactant solutions in attractive home & personal care, crop solutions, and coating & resources markets. This diversity increases IOD’s earnings stability and resilience. The surfactants market has seen consistent growth over the last decade, driven by trends in population growth, urbanization and increasing hygiene awareness amid the global pandemic.

Alastair Port, Executive President, IOD, IVL, said, “This highly complementary acquisition propels IOD’s growth potential and adds a premium to our integrated global portfolio. Oxiteno’s surfactants business extends our profile into higher-margin branded products that are closer to end-consumers in very attractive growth markets. These are exciting times for IOD, and I welcome our new Oxiteno colleagues to our journey together. This is an opportunity for Oxiteno’s talented people to reach their full potential as part of a larger petrochemicals company with shared values and a mutual commitment to sustainability.”

Oxiteno’s product offering remains the same and is enhanced by being linked to a complementary company with a powerful global footprint, an integrated and innovative product portfolio, and deep expertise across the petrochemical value chain.

The Oxiteno transaction has an enterprise value of 6.1x EV/EBITDA based on 2021 results and is earnings accretive immediately. It is fully financed by free cash flows, including a deferred payment of US$150 million in April 2024, working capital short-term assets, and interest-bearing debt. IVL expects to drive savings of US$100 million through portfolio adjustments, asset optimization and operational excellence.