Kraton Performance Polymers is making a billion-dollar move into renewable specialty chemicals.
Houston-based Kraton will spend $1.37 billion to buy Arizona Chemical Holdings Corp. — which in spite of its name is based in Jacksonville, Fla. Arizona Chemical makes specialty resins and chemicals mainly based on pine wood for adhesive, road construction and tire markets. These products include phenolic resins as well as polyterpenes.
Kraton is a major producer of styrenic block copolymers. In a news release, Kraton President and CEO Kevin Fogarty said that the acquisition is part of his firm's three-part strategy and that it creates new opportunities for Kraton to deepen customer relationships in core markets.
The deal is expected to close in late 2015 or early 2016. The primary owner of Arizona Chemical is American Securities LLC, a New York-based private equity firm.
Kraton in 2014 had planned to merge with the SBC operations of Taiwanese chemicals firm LCY Chemical Corp., until a massive gas pipeline explosion affected LCY's financial outlook.
Kraton operates plants in five locations worldwide and posted sales of more than $1.2 billion in 2014. The firm has had a challenging year on Wall Street, where its per-share price was near $21 on Jan. 1 but was under $18 in early trading Sept. 28.