PolyOne Corp., North America's largest compounder and concentrate maker, has entered South America for the first time with a pair of acquisitions in Brazil.
Avon Lake, Ohio-based PolyOne Corp. announced Jan. 3 that it has acquired Uniplen Indústria de Polímeros Ltda., a leading Brazilian producer of specialty engineered materials and distributor of thermoplastics. PolyOne is paying $21 million for the company, plus additional consideration during the next three years, depending on Uniplen's results. In October, PolyOne completed its purchase of Polimaster, a Brazil-based maker of color and additive masterbatch concentrates.
Stephen Newlin, chairman, president and CEO of PolyOne, said the Uniplen deal gives his company local expertise in the specialty engineered materials market, plus an attractive position in Brazil's resin distribution sector.
The combination of Uniplen and our previously announced acquisition of Polimaster firmly establishes our specialty product offering and overall customer service capabilities in Brazil, Newlin said in a news release.
We now have specialty engineered materials, color masterbatch and distribution capabilities in Brazil, providing the necessary critical mass to serve our global customers in the region.
Uniplen, with sales of $34 million, employs 125 at plants in São Paulo and Santa Catarina. The company generates 70 percent of its sales from compounding, with the remainder coming from resin distribution. Polimaster has annual sales of $4 million and employs 64 at plants in São Paulo and Novo Hamburgo.
PolyOne acquired both businesses from local ownership. Local management is expected to stay in place at both firms.
Both Uniplen and Polimaster serve customers in diverse end markets including consumer, transportation and appliance. Prior to the acquisitions, PolyOne had imported its materials into the region.
Robert Patterson, senior vice president and chief financial officer, said PolyOne is continuing to look for opportunities in high-growth regions such as Brazil, Asia, and the Middle East, as well as in attractive end markets such as consumer and health care.
News of the acquisition came the same day that shares of PolyOne rose 11 percent, after KeyBanc Capital Markets Inc. upgraded its opinion of the company. The company's shares rose $1.31, or 10.5 percent, to $13.80.
We believe [PolyOne's] restructuring efforts are largely complete and a growth phase is on the horizon, wrote analyst Michael Sisone. He upgraded PolyOne to buy from hold, and gave its shares a price target of $18.
PolyOne enjoyed strong financial returns in the first nine months of 2010, with sales climbing 33 percent to $2 billion and profit more than doubling to $65 million, when compared to the same period in 2009.
In that nine-month period, PolyOne's distribution unit led the company with a sales gain of 60 percent, reaching $695 million. The distribution unit's operating income also more than doubled to $32 million, while operating income at its specialty unit – including global specialty engineered materials, color, additives and inks – also more than doubled, to $68 million.