Mexichem Looking for up to $3bn

Mexichem is looking for up to $3bn through a 3-5 year revolving loan facility as it searches for acquisition targets in the chlorine, fluorine and high-end plastics sectors. Although the revolver would be used to finance potential acquisitions, the funding is not deal driven, says a Mexico-based investment banker. “It’s a nice to have for them,” he adds. The chemical conglomerate is looking at 4-5 different targets, he adds, and is planning to vertically integrate three main sectors. In the chlorine supply chain, Mexichem is hoping to acquire upstream assets to reduce costs for its production of PVC and plastics. In the fluorine chain, it has already completed some acquisitions as part of a strategy to buy more downstream refrigeration assets. The banker says it is also looking for targets in the high performance plastics sector, in an effort to sell to the aerospace and health care industries. Mexichem acquired US-based plastic compounding business AlphaGary for $300m in cash last year. CFO Armando Vallejo Gomez told LatinFinance earlier this year that the company plans to keep acquiring companies until it becomes a world leader in the products it sells. As part of its expansion plans, Mexichem recently acquired a fluorocarbon producer in Japan for an undisclosed amount from Showa Denko. The plant generates 10,000 tons of refrigeration gas per year. The company says the acquisition represents a significant step in its plans to accelerate its growth in the refrigeration sector, making it the only producer of R-125 refrigeration gas outside of China.