By Patrick Raleigh, ERJ On-line news editor
Cleveland, Ohio-PolyOne Corp. is to sell its Elastomers and Performance Additives unit to an investment group led by New York-based equity firms Lion Chemical Capital LLC and ACI Capital Co. Inc. The sale, for around $120 million, is due to close in the third quarter, said a 29 June PolyOne announcement.
PolyOne said the agreed price, which consists of $106 million in cash and $14 million in the form of notes, is â€œwithin its range of estimates for the sale of the Elastomers unit.â€ The business reported a turnover of $349 million for the 12 months to 31 March, 2004.
â€œWe are satisfied that we have negotiated a fair value, and we plan to apply the proceeds to debt reduction,â€ said Thomas Waltermire, president and CEO, in a press statement.
â€œThis business has the capacity and proven capability to grow, and we are committed to its success,â€ according to Peter De Leeuw, managing director of Lion Chemical Capital and prospective chairman of the new company.
The investment group foresees â€œno immediate change in business practices of the Elastomers unit, and no effect on Elastomers customers, suppliers or employees,â€ said De Leeuw. The current management team, will remain in place headed by John Quinn, as vice president and general manager, he added.
Lion Chemical Capital is primarily focused on the chemicals sector, while ACI Capital specialises in management buyouts and capital investments across a range of industries.
Headquartered in Solon, Ohio, PolyOne Elastomers and Performance Additives operates five manufacturing facilities in the US and one each in Mexico and the UK. The unit's first rubber compounding facility in China is due to open near Shanghai later this year.
The PolyOne business supplies thermoset elastomer and rubber compounds based on a wide range of materials from natural rubber to fluoroelastomers. It also supplies thermoset polyurethane compounds for foamed and non-foamed castable products used in applications such as automotive, carpeting, furniture and healthcare.
The firm's additives portfolio includes accelerators, fillers, vulcanisation agents and tackifiers, as well as colorants and speciality additives for latexes, plastisols, polyurethanes and epoxies.