In a recent announcement made by Synalloy which is a major industrials company focused on the production of PVC piping, tubing, and other specialty chemicals, it was revealed that the company has completed the acquisition of DanChem which is a leading specialty chemicals contract manufacturing organization in order to accelerate its product development capabilities and to get entrance into new end markets and applications.
DanChem is a leading specialty chemicals contract manufacturer and has three production plants in Danville, Virginia. The DanChem facility in Virginia is particularly unique and has a large fleet of horizontal reactors in the industry and produces a broad array of diversified chemical products. The acquisition has cost Synalloy around $32.95 million which was funded out of the company’s existing credit facility.
The strategic rationale behind the acquisition includes the acceleration of product development capabilities in which DanChem brings leading engineering and process development capabilities and the expansion of existing process offerings for which DanChem’s production plants and horizontal reactors are expected to drastically accelerate the long term investment plans of Synalloy chemicals. And with the acquisition in place Synalloy will have access to a larger presence in target end markets and applications.
Synalloy Corporation is a company which is engaged into a number of business activities which include the production of stainless steel and galvanized pipes and tubing, carbon pipes, and specialty chemicals.
As per ChemAnalyst, “the acquisition of DanChem by Synalloy is expected to provide Synalloy with the synergies arising out of the acquisition in terms of the added revenue which is around $30 million in 2020. The acquisition also comes in the background of the reviving construction sector globally hence the demand for pipes and tubes is expected to rise in the near term. Therefore, the acquisition is targeted at capturing the growing demand for pipes from the construction sector.