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Topics Materials, Mergers & Acquisitions, Materials Suppliers
Companies & Associations Solvay SA
Belgian materials group Solvay SA has announced the sale of its 70.59 percent stake in Brazil-based Solvay Indupa S.A.I.C., the second largest producer of PVC in South America, to Braskem. In a separate announcement, U.S. private finance firm OpenGate Capital LLC said it has signed an exclusivity agreement with Solvay to acquire its Benvic PVC compounding business, which has three manufacturing plants in Europe.
Solvay Indupa has 936 employees and two production sites in Argentina and Brazil. Its net sales were 542 million euros in 2012.
Solvay said that transaction is based on a total enterprise value of $290 million, which includes Solvay Indupa’s net financial debt, accounted at year-end 2012 as 178 million euros. The cash proceeds for Solvay’s equity stake are $25 million. Brussels-based Solvay said the divestment is expected to result in a non-cash net loss of about 120 million euros.
“This divestment is part of Solvay’s strategic portfolio management. It will reduce the Group’s exposure to the economic cycle and to energy-intensive businesses, allowing Solvay to achieve higher growth, higher returns and lower capital intensity,” said Jacques Van Rijckevorsel, member of Solvay’s executive committee, in a statement.
Braskem is based in São Paulo, Brazil.
Solvay Indupa has two PVC plants producing resin for the production of pipes and fittings, based in Santo André, Brazil, and Bahia Blanca, Argentina, with combined production capacity of more than 1 billion pounds per year.
Braskem and Mexico’s Mexichem had previously confirmed interest in purchasing the Indupa assets
Meanwhile, Los Angeles-based OpenGate Capital said its acquisition of Benvic, which is expected to be completed in the first half of 2014, would complement its growing position in the European PVC market. In January 2013, the group acquired PVC profile extruder Profialis from Tessenderlo Group.
Andrew Nikou, OpenGate Capital’s founder, managing partner and CEO, said in a statement: “Profialis and Benvic would have a total annual production capacity of more than 200,000 tonnes and close to $330 million in consolidated annual revenues.”
Benvic’s manufacturing facilities are in France, Italy and Spain. The business employs around 200 people and has annual revenues of $220 million.