Selling elastomers
2 Jul 2004
PolyOne Corporation is to sell its Elastomers and Performance Additives business to an investor group led by Lion Chemical Capital and ACI Capital.
PolyOne will receive gross proceeds before associated fees and costs of approximately $120 million, of which $106 million will be paid in cash and $14 million in the form of a note from the buyer. The transaction, which is expected to close in the third quarter, is subject to customary closing conditions and the buyers' receipt of their financing.
With headquarters in Solon, OH, the PolyOne Elastomers and Performance Additives business group operates five manufacturing facilities in the US and one each in Mexico and the UK. Its first rubber compounding facility in China is slated to open near Shanghai later this year.
Revenues for the four quarters ended March 31, 2004, were $349 million, which represents 13.5% of PolyOne's total sales from both its continuing and discontinued operations during that period.
PolyOne announced last October that, as part of its efforts to improve profitability and strengthen its balance sheet, it would confine its strategic emphasis to its Plastics Compounding, Color and Additives Masterbatch, and Distribution businesses.
In line with this goal, the company said that it would divest its Elastomers and Performance Additives, Engineered Films and Specialty Resins businesses. It expects to complete all three dispositions this year. The pending Elastomers divestment is the first such disposition.
"We anticipate no immediate change in business practices of the Elastomers unit, and no effect on Elastomers customers, suppliers or employees. The unit's current management team, headed by PolyOne Vice President and General Manager John E. Quinn, will remain in place," said Peter De Leeuw, managing director of Lion Chemical and the prospective chairman of the new company.
