February 3 was a busy day for materials maker PolyOne Corp., as the firm announced a specialty materials deal and released full-year earnings for 2015.
Avon Lake, Ohio-based PolyOne is paying $72 million to Kraton Performance Polymers Inc. of Houston for “certain technologies and assets.” PolyOne officials said in a news release that the assets were thermoplastic elastomer-related. Kraton said they were compounding assets. Kraton's TPE products are based on styrenic block copolymers.
PolyOne officials added that the deal will allow it to further expand its TPE business, which includes its GLS product line. PolyOne and Kraton also have entered into a supply agreement under which Kraton will supply certain raw materials used by the acquired business.
Kraton said that taking into consideration projected sales under the supply agreement, selling the compounding business will have a net impact on its total sales of less than $25 million.
End markets served by the acquired products include adhesive and removable protective films, as well as packaging, medical devices and personal care products.
“This transaction will enable Kraton to focus on its core strengths around polymer design, and enable PolyOne to focus on its leading capabilities as a provider of polymer formulations,” Kraton President and CEO Kevin Fogarty said in a news release.
On the financial side, PolyOne's 2015 profit surged 85 percent to almost $145 million, even as sales fell 12 percent to just under $3.4 billion.
The firm in 2015 also posted adjusted earnings per share of $1.96 — the highest in PolyOne's 15-year history. Fourth-quarter adjusted EPS of 39 cents also was a company record. PolyOne now has posted 25 consecutive quarters of year-over-year adjusted EPS growth.
“During these uncertain global economic times, we remain focused on what we can control — executing our proven strategy and serving our customers,” President and CEO Robert Patterson said in the release.
Full-year sales in PolyOne's Designed Structures & Solutions unit — including the former Spartech sheet business — fell almost 27 percent. Sales in Performance Products & Solutions — including PVC compounds — were down 15 percent, while sales for Specialty Engineered Materials lagged more than nine percent.
Smaller sales losses were seen in distribution (down 7.2 percent) and Color, Additives & Inks (down 4.7 percent). Based on sales, distribution was PolyOne's largest operating unit in 2015, generating just over 29 percent of total company sales.
On Wall Street, PolyOne's per-share stock price was near $36 as recently as early December, but, like many stocks, has tumbled since then. The price was just under $24 in early trading Feb. 3.