Axiall Corp. announced the sale of two PVC-related business units and announced full-year results for 2015 on Feb. 25.
The Atlanta-based firm is selling its PVC window and door profiles business to private equity firm OpenGate Capital of Los Angeles. That business was part of Axiall's Royal Building Products unit. The sale includes seven manufacturing plants and a PVC compounding plant in Concord, Ontario. No purchase price was disclosed.
OpenGate officials described the business as a leading manufacturer of rigid and cellular vinyl window and patio door profiles, as well as interior vinyl shutters and other extruded vinyl products. OpenGate already owns three PVC-related assets: resin maker Kem One SAS in France, profile extruder Profialis in France and Benvic, a compounder with three locations in Europe.
In a news release, Axiall president and CEO Tim Mann said that selling the window and door profiles unit “leaves Royal Building Products with the solid core product lines that generate better EBITDA margins, namely our siding, trim, moulding, fittings and pipe businesses.”
In its second Feb. 25 transaction, Axiall sold part of its PVC additives business to Galata Chemicals of Southbury, Conn. That business, operating as Solucor, includes a plant in Bradford, Ontario. The business makes high-quality additives for rigid PVC applications, focusing on a broad mix of process aids and impact modifiers. No purchase price was disclosed.
Galata also makes PVC additives at plants in Louisiana and Germany. Indian chemicals firm Artek Surfin Chemicals took full ownership of Galata in 2014 when it bought out a business partner. In a news release, Galata president Steven McKeown said that his firm was “excited to add such a strong, complementary product portfolio” with Solucor.
In addition to those two deals, Axiall on Feb. 25 reported a loss of $816.4 million for 2015 as sales fell almost 12 percent to $3.36 billion. Most of the loss can be attributed to a non-cash charge of almost $850 million for goodwill impairment that Axiall took in the third quarter, as the firm wrote down the value of some of its holdings.
Full-year sales in Axiall's chlorovinyls unit — including PVC resin and compounds — fell 14.5 percent to $2.5 billion. Sales in its building products unit, including Royal, fell almost 3 percent to $855 million.
“We have accelerated our work to reduce costs, improve productivity and optimize our portfolio,” Mann said in a news release.
And as if all of that activity wasn't enough, Axiall continues to battle a takeover bid from Westlake Chemical Corp., which has offered a package totaling $2.9 billion. Axiall officials have criticized the offer, saying that it undervalues their firm.
Westlake recently took the step of nominating a slate of directors to the Axiall board, including plastics industry veterans Charlie Crew and Randy Woelfel. Axiall officials responded to that move on Feb. 16, saying in a news release that they believe Westlake's nomination of directors “is a clear attempt to force a sale of Axiall to Westlake at a price that significantly undervalues Axiall's assets and its long-term prospects.”
Westlake's offer is continuing to have a strong impact on Axiall's per-share stock price. The price was just under $10 in late January when the offer was made, but closed near $20 on Feb. 25.