The pending sale of Nexeo Solutions Inc.'s resin distribution unit to investment firm One Rock Capital Partners LLC will benefit both businesses, according to Nexeo's top plastics executive.
“Our entire team is very excited about it,” Shawn Williams said in a Feb. 15 interview with Plastics News. The $640 million deal “is a testament to the quality of the Nexeo brand,” he added.
Williams is plastics executive vice president for Nexeo, which is based in The Woodlands, Texas. Officials with One Rock have said Williams will continue to run the resin distribution business after the deal is completed. Plastics posted sales of just under $2 billion for Nexeo in the fiscal year ended Sept. 30. That amount was up 8 percent vs. fiscal 2017 and represented more than 49 percent of the firm's total sales.
“One Rock has experience in corporate carve-outs, so they'll be able to accelerate the [sale] process,” Williams said. “And [Nexeo's plastics unit] has market-leading positions around the world. We can create value as a portfolio company.”
Chemicals distributor Univar Inc. announced plans in September to acquire Nexeo, a distributor of specialty chemicals and plastic resins, for $1.8 billion. But Univar officials soon said they did not plan to keep the resin distribution business, which didn't mesh with Univar's existing businesses.
Williams joined Nexeo in 2012. He has more than 30 years of materials and industrial experience, including 21 years with General Electric Co.
Nexeo's plastics unit should benefit from being focused on plastics with One Rock, Williams said.
“We can streamline our processes as a plastics-only business,” he added. “We'll be able to drive investment and resources to drive plastics growth and create long-term value for our customers.”
The sale has been approved by the boards of directors of both Univar and Nexeo and is expected to close in the first half of 2019, subject to regulatory approvals and the closing of Univar's acquisition of Nexeo. Williams said that Nexeo will operate as a wholly owned unit inside Univar until the sale to One Rock clears.
One Rock, based in New York and Los Angeles, currently owns 10 businesses in a variety of industries. The firm focuses on control-stake equity investments in middle-market companies in North America, according to its website. Industrial conglomerate Mitsubishi Corp. of Tokyo is a strategic partner in One Rock. Nexeo currently distributes engineering resins for Mitsubishi in Europe.
Nexeo distributes resins, compounds and concentrates from nine dedicated facilities for more than 20 suppliers. Williams said that post-sale there shouldn't be a problem in cases where Nexeo was distributing both resins and chemicals for the same company, because they usually dealt with different units inside those firms.
Nexeo had been publicly traded since June 2016. The company was formed in 2011 when investment firm TPG Capital paid almost $1 billion for the distribution business of Ashland Inc.
In mid-2018, Nexeo opened a major new resin distribution site in Montgomery, Ill., outside of Chicago. The $13 million facility covers 158,000 square feet and is the largest in Nexeo's network. The Montgomery has double the warehousing and bulk processing capacity of Nexeo's previous Chicago-area location.
