Valence Group, an investment adviser created by the former chemical deals team of Bear Stearns, has added former Israel Chemicals Industries Ltd. Chief Executive Officer Akiva Mozes to help assist on mergers and acquisitions strategy.
Mozes has joined Valence’s senior executive panel comprised of ex-Cytec Industries Inc. (CYT:US) CEO David Lilley and Lasse Kurkilahti, who held the same post at Kemira Oyj (KRA1V), and CVC Capital Partners’s Tony Clinch, Ariel Levin, a partner at the firm, said today. The panel is focused on trends and providing advice on absorbing targets, he said.
Valence’s ranks have swelled to about 30 full-time bankers, carving out a niche by concentrating on the chemical industry to compete with Goldman Sachs Group Inc. (GS:US) and other advisers with a broader focus. Valence has announced 11 deals this year, valued at $7.5 billion in total and the pipeline going into 2013 is “extremely robust,” Levin said today. Former CEOs on the panel bring a bigger-picture perspective to M&A, Levin said.
“It is probably more valuable for chemicals than other industries because it’s more complex,” Levin said. “For clients and transactions there’s more of a need for the strategic insight and experience of someone who has run a major chemical company or acted as a principal investor.”
Mozes, 65, announced his planned departure from Israel Chemicals (ICL) after 13 years at the helm on Jan. 8. Under his leadership, the fertilizer maker increased sales to more that $7 billion and multiplied operating profit almost seven-fold, with both disposals and acquisitions along the way. He left two months ago and Israel Chemicals now faces a takeover approach by Potash Corp. (POT:US) of Saskatchewan Inc.
One challenge for former CEOs-turned-strategy-advisers is understanding that clients may operate in a different way to how they themselves set up their management teams and practices, Levin said.
Private equity firms are also finding rich pickings among executives in the chemical industry as they seek to build out their skill base in a still fragmented industry. Utz-Hellmuth Felcht, the former CEO of Degussa, joined One Equity Partners, and Gunter von Au, the former head of Sued-Chemie bought by Clariant AG, has joined Advent International Corp.
“These are individuals that can sit across the table and have faced many of the issues of private equity and CEOs, whether post-deal synergy extraction, carve outs, integration, or any issue,” Levin said. “No bank can be all things to all clients, but it’s kind of amazing how many still try. We’ve got a target market: it’s chemicals M&A, nothing more, nothing less.”
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