PolyOne among notable '12 deal makers

By Frank Esposito
Senior Staff Reporter

Published: January 29, 2013 3:44 pm ET
Updated: January 29, 2013 3:51 pm ET

Related to this story

Topics Mergers & Acquisitions
Companies & Associations Companies & Associations, PolyOne Corp.

Deal volume in plastics materials mergers and acquisitions showed modest growth in 2012, while valuations for those deals remained high when compared to other areas of the plastics market.

The resin, color and compounding sector recorded five more global deals in 2012 than in 2011, according to P&M Corporate Finance LLC in Southfield, Mich. That's a hike of 9 percent. When divided by product segments, resin showed six more deals for a 12 percent increase.

Average valuations for materials deals ranged from six to 11.5 times earnings in 2012, according to Polymer Transaction Advisors Inc. of Newbury, Ohio. That was the highest range among seven plastics categories tracked by PTA.

One 2012 deal remarked on by several M&A executives contacted by Plastics News was PolyOne Corp's purchase of plastic sheet maker and compounder Spartech Corp. for almost $400 million. That deal stood out because it will move Avon Lake, Ohio-based PolyOne, North America's largest compounder and con­centrate maker, more into plastic products, as compared to raw materials.

Elliott Farkas, commercial/industrial group vice president with William Blair & Co. in Chicago, said he would not be surprised if PolyOne divested some of the assets it has acquired from Spar­tech. Market pros Bill Ridenour and Thomas Blaige each said the deal might cause PolyOne to compete with some of its own customers. Ridenour is owner of PTA. Blaige is president of Thomas Blaige & Co. LLC in Chicago.

Andrew Petryk — managing director and principal at Brown Gibbons Lang & Co. in Cleveland — said the PolyOne-Spartech deal "is different, but I'm not sure if that makes it more risky." At Chicago-based Stout Risius Ross Inc., director David Evatz said that "the verdict is still out" on the deal, which likely won't be judged accurately until three years from now.

Ridenour also singled out resin distributor M. Holland Co.'s acquisition of fellow distributor Christler Chemical & Plastics Inc. — a deal in which Ridenour represented Holland.

Holland, based in Northbrook, Ill., "had strong geographic reasons" to do the deal with Wilsonville, Ore.-based Christler, which generates most of its sales from the Pacific Northwest, Ridenour said. Holland also wanted to increase its sales volume in engineering resins, he added.

Other notable plastic materials deals in the second half of 2012 included:

• Georgia Gulf Corp.'s merger with the commodity chemicals business of PPG Corp. Atlanta-based Georgia Gulf is a major supplier of PVC resins and compounds. The deal calls for PPG shareholders to own 50.5 percent of the new company, which will operate as Axiall Corp. The transaction also includes a $900 million cash payment from Georgia Gulf to Pittsburgh-based PPG, as well as Axiall taking on $200 million of debt.

• Resin distributor Ravago Holdings Americas was involved in three deals during the year, buying PET distributors Burcham International of Columbia, S.C., and Meckler & Associates of Menands, N.Y., as well as elastomer processor Goldsmith & Eggleton Inc. of Wadsworth, Ohio. Ravago is based in Orlando, Fla.

• Compounding firm A. Schulman Inc. bought compounder ECM Plastics Inc. of Worcester, Mass., for $36.5 million. The ECM deal was the sixth acquisition in less than three years for Fairlawn, Ohio-based Schulman.

• Chemtura Corp. sold two plastic additive product lines — antioxidants and ultraviolet stabilizers — to private equity firm SK Capital for almost $200 million. The deal included six global plants. Officials with New York-based SK estimated that the two businesses could generate annual sales of around $500 million.


Comments

PolyOne among notable '12 deal makers

By Frank Esposito
Senior Staff Reporter

Published: January 29, 2013 3:44 pm ET
Updated: January 29, 2013 3:51 pm ET

Post Your Comments


Back to story


More stories

Image

Brown signs California's plastic bag ban into law

September 30, 2014 1:38 pm ET

Gov. Jerry Brown (D) made it official today: plastic bags are banned across the entire state of California.    More

Image

New Hexcel plant will supply carbon fiber for Airbus A350 XWB

September 30, 2014 2:43 pm ET

Hexcel Corp. is investing $250 million on a new carbon fiber plant in France, with part of the production going into the future Airbus SAS A350 XWB.    More

Image

Welding equipment supplier Forward completes expansion

September 30, 2014 4:08 pm ET

Plastic welding equipment producer Forward Technology completed an expansion it predicts will help customers become more efficient and cut costs.    More

Image

Extreme Tool uses remote Michigan location to attract younger workers

September 30, 2014 3:47 pm ET

“I'm not saying there's anything wrong with being an old guy like me. But I do believe in the power of youth and reinvesting in training. The...    More

Image

LyondellBasell CEO Gallogly to retire

September 30, 2014 3:00 pm ET

James Gallogly, CEO of Houston-based polyolefins producer LyondellBasell Industries NV, on Sept. 29 announced plans to retire in 2015.    More

Market Reports

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our industry analysis highlights macro industry trends and micro trends faced by companies that do business in Mexico. The report also provides key industry statistics and forecasts to anticipate future industry expansion.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events