Chemical Solutions Group (CSG), an Irish specialist chemicals company, is in talks with two or three potential acquisition targets at various stages in Ireland and the UK, according to CEO Kevin Quinn.

It is interested in acquiring peers in these two countries that can add products, business segments, customers and staff to help it scale up and to accelerate growth, Quinn told Mergermarket.

It hopes to agree at least one more deal this year, he said, adding that any target would have to be the right fit and bring value.

The family-owned company, which manufactures and supplies chemicals to the municipal drinking water, wastewater and industrial sectors, has already made one acquisition this year. In January, it announced it had agreed to buy Celtic Water Care Solutions, a Cork-based wastewater and effluent treatment chemicals specialist serving private-sector customers across Ireland, subject to approval by the Irish competition authority.

This acquisition will help CSG achieve its long-term strategy, which is to grow revenues to EUR 150m by 2030 from EUR 65m in 2025, according to the deal announcement.

This growth will come from a combination of organic and non-organic growth, Quinn said. Last year’s revenues grew by 12%, he noted.

On the organic side, CSG expanded into the UK last year and significantly exceeded its initial target to supply 1,500 tonnes of caustic soda. In fact, it supplied 17,000 tonnes of caustic soda in its first year, Quinn noted.

This strong organic growth sets a good foundation for M&A in the UK market, the CEO said. Within a few months of launching in the UK, the company has around 35 active UK customers, he said.

Acquisition targets will ideally have revenues of around EUR 20m to EUR 25m, but CSG could also look at smaller niche companies that would broaden its portfolio, he said.

It prefers to acquire a 100% stake in targets but is also open to buying majority stakes initially, Quinn said.

It is not currently planning expansion outside of Ireland and the UK as there is plenty of growth potential in its existing markets, he said.

“Over the last five or six years the industry has suffered, first from the COVID-19 pandemic and all the uncertainty and turbulence that came with that, quickly followed by the Ukraine war and rising energy prices, supply chain issues and now geopolitical uncertainty. Additionally, there are challenges regarding legislation and regulation. The chemical industry is front and centre of sustainability,” Quinn said.

It can often be easier for smaller companies to handle these challenges by partnering with a larger organisation that has dedicated human resources, finance, health and safety personnel and structures, he said.

“The market is becoming increasingly complex and you need to be able to provide all of these functions,” Quinn said.

Within the municipal segment, population growth and increasing legislation regarding wastewater is helping to drive demand, while in the industrial segment, companies are increasingly seeking strong, flexible suppliers with a robust supply chain that can offer a complete solution and dynamic lead times, the CEO said.

Celtic Water Care has annual revenues of EUR 18.5m, which the CEO said is an ideal size for CSG as it is large enough to make a meaningful impact, and at the same time it is of a size that can be comfortably integrated into the group without overextending the organisation.

Future acquisitions will be financed using a combination of balance sheet and bank debt, Quinn said, adding that CSG generates healthy free cashflow. However, it does not want to overleverage the business, he added. The company has no set budget for M&A.

It is also taking an opportunistic approach to M&A given that the pool of potential targets is quite limited, Quinn noted. CSG knows other players in the market and co-operation between companies has built strong relationships with company owners, he said. Talks about potential deals are mainly on an off-market basis, he added.

Sourcing for deals takes place largely in-house, but it is seeing more inbound approaches from owners, particularly after a deal has just been announced, Quinn said. It also uses external advisers for financial due diligence and legal matters to close deals, he said.

On the Celtic Water Care acquisition, it worked with corporate advisers Pegasus Capital, PwC for financial and tax due diligence, and law firm Pinsent Masons.

Company background

The company was founded in 1981, under the name of Chemifloc, by chemical scientists Ed Storey, who died in 2017, and Hilary Lawless. It rebranded as CSG last year.

CSG serves as the parent company for two main brands – Chemifloc and GI Chemicals – and also has its own inhouse testing lab under the name of Chemilabs. It has around 100 employees, according to the January press release.

Its industrial clients include global brands in the agriculture, food and beverage and pharmaceutical industries. Its products are used to ensure clean water, safe food and drink, and some of life’s essential products.

CSG is fully owned by the families of both founders, which brings stability and a long-term perspective as well as the ability to make quick decisions, Quinn said, adding that it takes pride in being a family business.

The next generation of both families are represented at board level and are actively involved in the business, Quinn added. They include Hilary Lawless’ son Evan Lawless, who is head of sustainability, and Chief Science Officer Dr Ed Roycroft, who is Ed Storey’s son in law.

Quinn joined the company as CEO in 2023, becoming the first non-family member to run the business. One of his key tasks was to establish a strategy for future growth, which he did with the assistance of KPMG, he said.

One of its key focuses for 2026 is to execute on this five-year plan, from 2025 to 2029 inclusive, which will involve investing EUR 15m to among other things expand production capacity, modernise its plants, and increase storage capacity for bulk imports of chemicals at its sea-fed tank farms.

The company has also been seeking to strengthen the senior leadership team. Over the past 18 months, Quinn has brought in a new chief revenue officer, a new chief financial officer and a new chief people officer.

The company receives occasional inbound takeover approaches but the owners are not actively seeking to sell either the company or a stake in the foreseeable future, Quinn said. CSG sees significant growth potential and hence has no reason to consider external investors. It also does not want to get distracted by any sale discussions, he said.