Petrochemicals maker Westlake Chemical Corp. of Houston is acquiring global compounder Nakan from OpenGate Capital in a $265 million all-cash deal.
“The combination of Nakan with Westlake's existing compounding business will present an excellent strategic fit,” Westlake President and CEO Albert Chao said in a Sept. 25 news release. “It will allow us to expand our compounding business globally and add important specialty products and technology to our existing portfolio.”
Nakan is based in Reims, France, and has eight production facilities: four in Europe, three in Asia and a North American plant in Mexico. The firm also has a research facility in France and application lab in the U.S.
Nakan has annual sales of about $300 million. Its compounds are used in a wide variety of applications, including automotive, building and construction, and medical.
OpenGate — Nakan's current owner — is a Los Angeles-based private equity firm. Westlake's exclusive, binding offer was made to allow Nakan to proceed with its consultation obligations with French works councils prior to entering into a negotiated, mutually binding purchase agreement.
The transaction is expected to close by early 2019, subject to regulatory approvals, completion of employee consultation procedures and other closing conditions.
OpenGate acquired Nakan in 2015 through the acquisition of Ivy Group. Ivy Group was formerly known as Kem One Innovative Vinyls.
The Westlake-Nakan deal continues a recent trend of resin makers expanding into compounding. Global polyolefins leader LyondellBasell Industries recently completed its acquisition of top compounder A. Schulman Inc. Celanese Corp. has made four compounding deals since 2014, most recently buying Omni Plastics LLC of Evansville, Ind., in December.
Westlake posted sales of just over $8 billion in 2017. The firm is a major producer of polyethylene, PVC resins and compounds and PVC building products such as pipe and fence. Earlier this year, Westlake announced plans to add 750 million pounds of PVC resin capacity at plants in Louisiana and Germany by the end of 2021.
