MAASTRICHT, Netherlands—Dow Polyurethanes is on the hunt for systems houses that fit with its strategy in higher added value markets segments, Jon Penrice, vice president Dow Polyurethanes, said at UTECH Europe 2018.
Dow officials "have gone through a strategic review," Penrice said, and are actively seeking out potential mergers and acquisitions.
"We want to pick up the pace again," Penrice said, noting that Dow is aiming to grow its system businesses at a rate between 8 and 10 percent.
When it comes to potential mergers and acquisitions, Dow is keeping its options open, casting a wide net in its search in terms of market application, size and reach. The key, Penrice said, is finding the right fit, and Dow has an advantage because it has the resources that can help small, innovative firms thrive.
"There are small companies that lack scale, but have global ambition," Penrice said, "we can give them global growth and expansion.
"We are also very flexible on the type of M&A, they could turn into joint ventures (or) marketing alliances," Penrice added. "We are not dogmatic. We want the entrepreneur to have skin in the game and to want to continue. But we can help scale, and they can grow much faster with us, or they can cash out."
In helping smaller firms grow, either through acquisition or partnership, Penrice notes that Dow does something else. It improves its speed to market and creates a supply chain that more efficiently serves its customers.
The company is looking to make acquisitions across a variety of segments, including polyurethane coatings, adhesives, sealants and elastomers (CASE), along with composites and rigids. Particular areas of interest include technical insulation for pipes, protective coatings for truck floors and adhesives, Penrice said.
"Dow is a large company in the adhesive sector, but as a raw material supplier," Penrice said. "Dow is interested in industrial and construction adhesives, elastomers, and in small customers with high technology and higher than usual P/E margins."
While Dow is open to opportunities in additional markets, such as footwear, it also is keeping an eye on possible M&A activity within the composites sector, which is being driven by automotive and industrial applications.
"It's fairly small, compared to unsaturated polyester resins, but processability and performance are there," Penrice said of the composities market. "Polyurethanes sit in the gap where it is more processable than epoxy and higher performance than polyester."