Chemtura Corp. has entered into a definitive agreement to sell its PVC additives business to SK Capital Partners LP, a New York-based private equity firm.
The deal is valued at about $45 million, with the vast majority consisting of assumed liabilities, according to court documents.
Middlebury-based Chemtura, which had filed March 18 for Chapter 11 protection from creditors, announced on Dec. 23 that it has filed a motion with U.S. Bankruptcy Court in New York to make SK Capital the lead or “stalking horse” bidder for the PVC additives business. Other bidders will have an opportunity to submit offers for the business.
The auction for the assets is scheduled for Feb. 22, according to the bankruptcy court motion. If the deal is terminated, SK Capital could receive a $500,000 break-up fee, plus up to $750,000 in due diligence costs and expenses.
SK Capital already owns Aristech Acrylics LLC and Ascend Performance Materials — the former Solutia Inc. nylon business.
Chemtura's PVC additives business had sales of $374 million in 2008, and $177 million for the first nine months of 2009. About 49 percent of its sales are in North America, where the company has eight full-time employees.
The PVC additives business develops, manufactures, sells and distributes tin stabilizers, liquid and solid mixed metals, liquid phosphate esters, epoxidized soybean oil, thiochemicals, organic-based stabilizers, and impact modifiers used primarily in PVC applications. The company has plants in North America and Europe, including two principal facilities in Lampertheim, Germany, and Taft, La.
Chemtura Chairman, President and CEO Craig Rogerson said in a news release that the proposed deal with SK Capital “is the most certain way to maximize the value of the PVC additives business and is in the best interests of the company and all of our stakeholders.” He added that the unit has a strong position in the plastics industry, citing its technology, customers and employees.
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