Related to this story
Topics Mergers & Acquisitions Materials Suppliers
Companies & Associations A. Schulman Inc. Ferro Corp. Mitsubishi Chemical Corp.
The pace of global plastic materials deals picked up in the first half of 2013 when compared with the same six-month period in 2012.
Data from P&M Corporate Finance LLC in Southfield, Mich., shows that first-half resin, color and compounding deals totaled 32 — up 23 percent vs. 2012. Those deals made up 22 percent of the first-half total when divided by sector, trailing only injection molding (26 percent) in the P&M ranking.
Among product segments, resin and consumer were the only two categories that showed first-half 2013 growth when compared with the year-ago period, P&M officials said.
Longer-term, low-priced North American plastics feedstocks — resulting from shale gas development in the region — could make materials firms more attractive to potential buyers, according to Bill Ridenour, president of Polymer Trans¬action Advisors Inc. in Newbury, Ohio.
"Shale feedstock costs are much lower," he said.
"Those low feedstock costs might be the savior of the U.S. economy."
Plastics News covered a half-dozen materials deals in the first half of the year, including a pair of acquisitions by Tokyo-based Mitsubishi Chemical Corp. In February, Mitsubishi purchased the plastic compounds business of Tessenderlo Group of Brussels. That business includes four plants in France, Poland and China with annual sales of more than $150 million. Then in May, Mitsubishi added Comtrex LLC, a maker of PVC compounds and thermoplastic elastomers based in Warren, Mich. Comtrex employs about 40 and has annual sales of about $20 million.
In a news release, Mitsubishi officials said the Comtrex acquisition "is in line with [the group's] medium-term management plan" of increasing its manufacturing and sales into TPEs, cross-linked polymers, adhesive polymers and conductive polymers.
The resin distribution market had been quiet for a while until two deals broke the silence. On the final day of 2012, M. Holland Co. made the first acquisition in its 60-plus-year history when it bought Christler Chemical & Plastics Inc., a distributor of engineering and commodity thermoplastic resins based in Wilsonville, Ore. The acquisition gives Northbrook, Ill.-based M. Holland a presence in the Pacific Northwest and access to new customers, owner Ed Holland said.
The second recent resin distribution deal took place in February when Cheshire, Conn.-based Osterman & Co. Inc. acquired fellow distributor Quimtec LP of San Jose, Costa Rica. Quimtec distributes polyethylene and polypropylene resins throughout Central America for the Equistar unit of LyondellBasell Industries.
Meanwhile, compounder and resin distributor A. Schulman Inc. recently gave up on its attempts to buy Mayfield Heights, Ohio-based Ferro Corp., according to Schulman CEO Joe Gingo, who spoke with analysts in a July 2 conference call.
Schulman never upped its hostile bid of $563 million for Ferro, and Ferro officials remained committed throughout to pursuing their own turnaround strategy for the firm.