PolyOne Corp. of Cleveland has made another move to improve its overall financial picture by selling a British PVC compounding business to Hydro Polymers, a division of Norwegian conglomerate Norsk Hydro ASA.
No transaction price was disclosed in the deal, which covers a PVC compounding plant in Newton Aycliffe, England. The plant produces about 7 million pounds of material annually - primarily injection molding-grade compounds for the business equipment market - and generated sales of about $4.8 million last year.
PolyOne spokesman Dennis Cocco said the sale mainly includes customer lists and compounding formulations. Hydro had sold its 50 percent stake in the plant to PolyOne in 2000, but had continued to operate the plant for PolyOne on a contract basis. The business was formed in 1991 as a joint venture between Norsk Hydro and PolyOne forerunner BFGoodrich Inc.
Cocco added that the target market for the business was not large enough to justify PolyOne's continued involvement.
``We're still involved in Europe, but this [market] wasn't a place for us,'' he said.
The deal marks the third time in seven months that PolyOne has sold a noncore asset. In December, PolyOne, North America's largest compounder, sold its stakes in color compounder Techmer PM LLC of Los Angeles and thermoplastic elastomer maker So.F.teR SpA of Forli, Italy.
PolyOne has closed more than a dozen manufacturing sites since mid-2001. Company officials said last month that a recent refinancing puts PolyOne on more solid financial footing. The refinancing issued $300 million in new long-term debt while allowing PolyOne to meet an $87.8 million debt payment due later this year. The firm also gained access to a $225 million accounts receivable facility and a $50 million revolving credit facility.
On Wall Street, PolyOne stock was trading at $5.05 per share in early trading June 5. Its per-share stock price had been as low as $3.50 as recently as mid-March.