Pitch Best Small Cap Deal 2022: COIM – Synres

Name of the deal: COIM acquires Synres from Standard Investment 
Date announced: 13 January 2022 
Date closed: 31 December 2021 
Published value: 5 – 50 million euros 
Buyer(s): COIM 
Target: Synres 
Seller: Standard Investment and Management 

Involved firms and advisors 

Involved firms and advisors buy side:  
KPMG (Financial Due Diligence), Meijburg & Co (Tax Advisory), Loyens & Loeff and LCA STUDIO LEGALE (Legal advisory Corporate M&A) 

Involved firms and advisors target:  
n.a. 

Involved firms and advisors sell side:  
EY (M&A Advisory and Financial Due Diligence), Olym Advocaten (Legal advisory Corporate M&A) 

Pitch  

Brief description deal / Deal outline  
COIM has acquired Synres, a Dutch company specialized in the production of alkyd and acrylic resins for coatings volumes, from Standard Investment, a Dutch investment firm. The family-owned company COIM, producer of specialty chemicals, aims to become a dominant player in Europe in alkyd resins with the purchase of Synres. 

Why should this deal win the Award for Best Deal Small-Cap 2022?  
The deal realized significant value for both parties – buyer and seller. Sellers realized an above market return in the highly complex M&A landscape that was subject to several macro- economic dynamics, while the buyer was able to acquire a superior production location in a highly competitive chemical market with limited site growth capacity. Additionally, key stakeholders will receive significant continued benefits from the deal, where COIM has indicated commitment to continue to invest in site, plant, equipment, and human capital for years to come. The deal facilitated a smooth handover for Standard Investment to a reputable party who will provide the same level of commitment to stakeholder wide success. EY M&A ran a competitive process where strategics as well as financial investors were approached and chose the ideal momentum to drive and execute the deal. 

Deal rationale: 
In 2015, Standard Investment, together with management, acquired Synres from DSM. In six years under new leadership, volumes grew by more than 60%, an extensive modernization and capex program was executed, and a highly successful restructuring of operations was implemented. Over the investment period, Synres became the stand-alone strong brand again, with over 70 years of heritage the Company is a key pillar stone in the community and well known for its superior quality and constant innovation. In the last years under Standard Investment, the Company created a sustainable long-term plan and sought a reputable party to help accelerate it. Given the complexity of the chemicals landscape, a party who is able to commit to innovation, site, plant, equipment and human capital on a long-term horizon was key. Together with management, Standard Investment decided that a new shareholder would be best suited to execute this. 

What is the impact of this deal for the company?  
Company has been marked as a key strategic location for COIM. Ensuring sustainable investments in plant, equipment and human capital over a long-term horizon. The transaction further bolstered the stability and longevity of the Synres brand and operations. Further, the Company is potentially able to realize R&D plans quicker, supported by the R&D department and capital of COIM. COIM will support Synres to execute its strategy towards water born resins more swiftly – which has results in achieving a more advanced and future proof products with a positive impact on environment, and deliver durable, high-quality resins to clients. 

What is the impact of this deal for the direct stakeholders?  
Personnel, municipality and environmental life gained a valuable partner with a direct commitment (see Coim Group) to environmental standards and a long-term horizon. COIM has been able to gain an additional production location with ample room for growth well within set CO2 regulatory boundaries. Additionally, the strategic location of Synres near the port of Rotterdam provides COIM with significant purchasing benefits and lower logistical footprint to service North-European clients. With several new water-based resin innovations in the growth plan ready to be further analyzed, COIM will have additional opportunities to directly contribute to a lower environmental footprint of the paints industry. Benefitting all direct stakeholders in terms of long-term production mandate, focus on R&D and personnel, and product users.  

A direct quote from the CEO of COIM further underpins this:  

"The acquisition is aimed on one hand at enhancing the existing production and expertise of Synres in the field of resins and, on the other hand, at creating added value for both shareholders and employees. The investment plan foresees the creation of a second COIM production hub on site for esterification products, in addition to the one in Offanengo, in Italy. From the first months of the year, we will start the local production of Isoexter – COIM aromatic polyesters for the production of thermal insulation materials – and the production capacity expansion. This project will lead to the creation of a second production hub for all COIM esterification products. We will also invest on products already developed by Synres R&D, in order to establish Synres as an important player at international level in few years." explains Giuseppe Librandi, President and CEO of COIM. 

Direct shareholders realized an above market return in a complex M&A landscape: the deal was subject to complex CO2 regulations, international deal dynamics and the rise of energy prices. Through skill full negotiation and well-prepared process, the Seller was able to realize a superior return, executing the deal in a short time frame while locking in several key value driving parameters early in the deal. 

What is the impact of this deal on society?  
Refer to the above. 

What was most complex about this deal?  
Refer to the above.