UPDATED — Compounding leader PolyOne Corp. is denying a report that it bid as much as $2 billion for film and sheet major Klöckner Pentaplast Group.
“PolyOne is not bidding on Klöckner Pentaplast,” a company spokesman said.
An Oct. 16 Reuters story cited anonymous sources and listed Avon Lake, Ohio-based PolyOne and private equity firm Apollo Global Management LLC among four bidders for Montbaur, Germany-based Klöckner. The other two firms are not listed, but Bloomberg News last month identified Apollo and private equity firms Ares Management LP and Platinum Equity LLC as potential bidders.
Apollo Global declined to comment on the Reuters and Bloomberg reports.
"A deal of this size limits it to private equity buyers," said Bill Ridenour, president of Polymer Transactions Inc. of Newbury, Ohio. "Four or five private equities have the cash."
Among private equities, Klöckner would fit well with Apollo Global, according to Ridenour.
"[Apollo Global] management have the most experience in polymers," Ridenour said in an Oct. 16 phone interview. The company lists on its website four key industries that theoretically could complement Klöckner: packaging, chemicals, consumer products and manufacturing.
One market source who requested anonymity said SVP could have a hard time getting a $2 billion sale price. That price would be a multiple of about eight times earnings before interest, taxes, depreciation and amortization (EBITDA), a high multiple give the stock market's recent gyrations.
In May, news agencies had reported that Klöckner's majority owner, Strategic Value Partners, had hired advisers and expected to receive tentative bids in July. Greenwich, Conn.-based hedge fund SVP acquired Klöckner Pentaplast in summer 2012 from New York private equity firm Blackstone Group LP. Blackstone had acquired Klöckner Pentaplast in 2007 from Cinven Partners LLP of London.
PolyOne has been on a multi-year buying spree, acquiring six businesses since 2007, including paying almost $500 million in late 2011 for liquid colorant maker ColorMatrix Inc. and almost $400 million to buy sheet maker and compounder Spartech Corp. The Spartech deal stood out, since it marked a move downstream into production of plastic products.
PolyOne ranks as North America's largest compounder and concentrate maker, with a market share estimated at 12 percent. The firm has annual sales of $3.8 billion.
Klöckner bills itself as the world's leading maker of film and sheet for pharmaceutical, medical devices, food, electronics and general-purpose thermoformed packaging. It also makes film for printing and specialty applications. For its 2013 fiscal year ended Sept. 30, Klöckner logged net sales of about $1.55 billion, up about 2 percent from the previous year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were about $225 million, up 14 percent from 2011-12. The company employs 3,100.
In North America, Klöckner's 2013 sales were estimated at $610 million, ranking 13th among the region's film and sheet makers, according to a Plastics News estimate. The firm operates seven North American plants that employ 1,100.
