By: Frank Esposito
June 12, 2014
Composites One LLC has bought the composites distribution business of Nexeo Solutions LLC for an undisclosed price.
The deal will allow Arlington Heights, Ill.-based Composites One to offer its “extensive product line, unmatched technical support, dependable service and delivery to more customers in the U.S. and now, across all of Canada,” officials said in a June 10 news release.
“We are looking forward to combining the talent and experience of both organizations,” President and Chief Operating Officer Leon Garoufalis added in the release.
About 100 Nexeo employees will join Composites One as a result of the transaction, including some based in offices in Dublin, Ohio; Montreal and at Nexeo’s headquarters site in The Woodlands, Texas.
Nexeo’s composites distribution business has annual sales of between $250 million and $300 million. Combining that with Composites One’s annual sales total of between $600 million and $700 million will create a massive composites distribution entity with annual sales of between $850 million and $1 billion.
Nexeo had been “a formidable competitor for many years,” Composites One marketing and communications director Marcy Offner said in a June 11 phone interview. “They’ve always helped us stay focused on value-added services. Both sides agree this is the right time to come together.”
She added that the deal will gain Composites One some new suppliers and will allow the firm greater access to the overall Canadian market. Previously, Composites One’s Canadian efforts had been focused in British Columbia.
The final deal may include some composites inventory, but won’t include any warehouses or property, officials said. The sale “reflects Nexeo’s strategic direction and fuels our multi-year transformation and commitment … to differentiate ourselves in the marketplace,” president and chief executive officer David Bradley said in the release.
Composites One has been solely owned by the Dehmlow family — through its Synergy 55 Corp. business — since 2012, when they bought out joint venture partner CCP Composites. The firm’s history dates back to 1940, when Louis H.T. Dehmlow III and two business partners founded Great Lakes Solvents in Chicago. Its current distribution mix includes resins, reinforcements, gelcoats, pigments and related products from more than 450 suppliers.
Nexeo was formed in 2010 when private equity firm TPG Capital paid $930 million for the global distribution business of Ashland Inc. In the first half of its 2014 fiscal year — ended March 31 — Nexeo posted sales of almost $2.3 billion. That total was up almost nine percent vs. sales in the first half of fiscal 2013. Nexeo’s sales are split almost evenly between chemicals and plastics, where it ranks as one of North America’s largest resin distributors.
Earlier this year, Nexeo paid $125 million to acquire Archway Sales Inc., a St. Louis-based chemicals distributor whose product mix includes some specialty plastic resins and plastic additives. Archway’s annual sales are estimated at about $200 million.