Private equity firm SK Capital Partners plans to acquire the antioxidant and ultraviolet light-stabilizer business of Chemtura Corp. of Middlebury, Conn.
New York-based SK Capital Partners said it has signed an asset purchase agreement to buy the business for about $200 million. The transaction is expected to close at the end of 2012 or in early 2013.
“Their business is a global business. They provide additives to the plastics and rubber industries,” said Barry Siadat, a managing director at SK Capital Partners, in a telephone interview.
“We will build around it. We see some strong possibilities, especially in antioxidants,” he said.
The deal will include six plants, including two in the U.S., two in Europe, one in the Middle East and one in Asia. It also includes shared facilities in Canada, Mexico, Brazil, Italy and Taiwan.
The business supplies antioxidants, antiozonants, intermediates and inhibitors, polymer modifiers and UV light stabilizers.
Chemtura said the deal will simplify its portfolio and the money will be used to repay debt and invest in continued growth.
The business unit's heritage draws from previous associations with Uniroyal, Great Lakes Chemical Corp. and GE Plastics, and SK Capital estimates it could generate revenues of more than $500 million a year, Siadat said.
The unit will operate as separate business and a new name will be announced at a later date.
“We believe that the transition from a non-core business within a large public company to a stand-alone organization will enable improved execution and a renewed emphasis on growth. Management has done an excellent job of redefining the businesses' strategy and successfully repositioning it as a strategic partner and solutions provider to customers,” said SK Capital Managing Director Jack Norris, in a news release.
“We are excited about teaming with SK Capital to expand and accelerate our growth and innovation initiatives,” said Peter Smith, president of the Chemtura unit, in a statement.
“SK Capital's track record of successfully completing corporate carve-outs and investing in companies in the polymer and related additives markets will ensure a smooth transition and position us well to realize our long-term strategic objectives.”
SK Capital focuses on companies in the specialty materials, chemicals and health-care sectors. Its portfolio companies generate revenues of over $3 billion annually and employ more than 3,400.
Latham and Watkins LLP acted as legal counsel to SK Capital.