DuPont-Spectrum deal tops busy first half for materials M&A

First-half merger and acquisition deals in plastic materials were capped off by DuPont Co. making a major downstream move into plastic products by acquiring Spectrum Plastics Group for $1.75 billion.

The purchase price represents a multiple of almost 16 times Spectrum's 2023 forecast earnings before interest, taxes, depreciation and amortization (EBITDA). Market analysts contacted by Plastics News said DuPont should benefit from the acquisition, although there was a chance the deal could put the firm in competition with some of its customers.

On a conference call with stock analysts, DuPont Chairman and CEO Ed Breen said Spectrum in the last year "has put in a fair amount of new production capacity that's getting filled up because of just the growth rate."

The acquisition came at the end of a period of heavy activity for both DuPont and Spectrum. Late in 2022, DuPont ended its bid to acquire U.S. composites maker Rogers Corp. for $5.2 billion because of delays in getting approvals for the deal from Chinese regulators.

Also last year, DuPont sold its Mobility and Materials unit — including its legacy nylon resin line and other engineering resins — to Celanese Corp. for $11 billion. On the products side, DuPont in July opened a new Liveo silicone biopharmaceutical tubing plant at its Cooper River site in Moncks Corners, S.C.

Spectrum has made three acquisitions since 2020. Last year, the firm invested in advanced additive manufacturing production and expanded clean room operations at its plant in Mexicali, Mexico. In 2022, Spectrum posted sales of $450 million and EBITDA of $95 million.

Alpharetta, Ga.-based Spectrum is a major extruder of medical tubing and also makes other medical products. The firm employs more than 2,200 at 20 global sites, including 14 in the United States.

Wilmington-based DuPont is buying Spectrum from New York-based financial firm AEA Investors, which has owned Spectrum since 2018. Spectrum was formed by the 2017 merger of Pexco LLC and PPC Industries, both of which were owned by investment firm Kohlberg & Co. LLC of Mount Kisco, N.Y.

DuPont officials said Spectrum's product mix complements existing DuPont products such as Liveo-brand silicone solutions and Tyvek-brand medical packaging.

The first half also saw three deals made in the resin distribution market.

Greg Boston became sole owner of resin distributor General Polymers Thermoplastic Materials LLC when he bought all remaining equity interest in the firm from Michael Kirtley. Boston and Kirtley had co-founded the firm in 2016 in Clarkston, Mich. It's now based in Rochester Hills, Mich.

General Polymers supplies small to midsized processors with a focus on prime, certifiable grades of engineering resins and compounds. Its supply partners include Asahi Kasei, Elix Polymers, Nycoa and Enviroplas.

In another resin distribution deal, Formerra LLC made a deal of its own less than six months after an ownership change, acquiring Irish materials supplier Total Polymer Solutions for an undisclosed price.

Cleveland-based Formerra has worked with TPS of Dublin for more than a decade, Formerra officials said. TPS sells into Ireland, the United Kingdom and other parts of Europe. The firm serves the manufacturing operations of multinational health care customers. TPS was launched in 2002 and distributes a wide range of resins, compounds, concentrates and thermoplastic elastomers.

The acquisition "will enable Formerra to strengthen its global health care distribution platform while building on both companies' shared capabilities around rapid product development, innovation and regulatory support," CEO Cathy Dodd said in the release.

Miami-based HIG acquired Formerra — the former Avient Corp. resin distribution unit — in a $950 million all-cash deal in late 2022. Dodd had led the distribution business for Avient since 2020 and took on the CEO role at Formerra. As part of Avient, Formerra posted 2021 sales of a little more than $1.6 billion. The business distributes resin and compounds for 21 suppliers, including Dow Inc., BASF and LyondellBasell Industries.

Global distribution firm Vinmar International Ltd. acquired a controlling interest in Syncot Plastics LLC, a recycler based in Belmont, N.C. Officials with Houston-based Vinmar said Syncot is "an innovative leader" in recycling post-industrial and post-consumer nylon, polypropylene and polyethylene into a high-quality product. They added that Syncot has done recycling in North Carolina and Georgia for almost 30 years.

Vinmar CEO Vishal Goradia added that the acquisition "demonstrates our firm commitment to tangible solutions for sustainability and circular economy."

The deal is Vinmar's second plastics recycling acquisition in less than a year. In 2022, the firm bought Green World Compounding of Spain. Vinmar has more than 50 offices in more than 35 countries, with sales in more than 110 countries.

Expanded polystyrene maker NexKemia Petrochemicals Inc. bought PS recycler Eco-Captation of Prévost, Quebec, in a deal that aims to utilize artificial intelligence to boost the use of recovered materials in new products.

Eco-Captation "combines artificial intelligence-enhanced optical sorting technology with a seamless mechanical recycling process to convert plastic waste into high-quality raw materials made with post-consumer recycled material."

NexKemia is based in Mansonville, Quebec, not far from the Vermont border. Eco-Captation is north of Montreal. The two locations are separated by about 130 miles.

Additives and colorants supplier Vivify Specialty Ingredients, backed by its private equity owner, acquired Reitech Corp., a Reading, Pa., maker of pigment dispersions. Vivify makes specialty chemicals for colorant applications and specializes in dyes, organic pigments, slip additives and liquid colorants.

Both companies have been in business more than 40 years, though Vivify previously was known as Aakash Chemicals & Dyestuffs Inc. Aakash was bought in January 2017 by CenterOak Partners LLC of Dallas. The name changed to Vivify in mid-2021, and the firm was acquired by Gryphon Heritage Fund, its current owner, in December 2021.

Craig Nikrant, operating partner with Gryphon Heritage Fund, said in the release that Vivify and Reitech will seek additional acquisitions to drive growth.

Italian compounder Taro Plast SpA acquired compounder and resin distributor Delta Polymers. Sterling Heights, Mich.-based Delta operates its compounding unit as Amplas Compounding. Most materials compounded by Delta are based on engineering resins. The firm also distributes similar materials.

Delta is owned by the Beaupre family. Del Beaupre founded the firm in 1978. According to Delta's website, the firm was the first company to provide a closed-loop plastics recycling solution to a General Motors injection molding plant.

It's the second U.S. deal in less than six months for Soragna, Italy-based Taro Plast. In October, the firm acquired the copolyester business of Celanese Corp. MBS Advisors of Florence, Mass., represented Taro Plast in the deal. Delta was represented by Polymer Transaction Advisors Inc. of Foxfire, N.C.

Antek Madison Plastics purchased a materials plant in Stryker, Ohio, from LyondellBasell Industries. Toronto-based Antek Madison is a resin distributor and recycler. The firm is using the Stryker site for pulverizing resins for rotational molding and blending resins for custom color and concentrates.

The Stryker site covers 110,000 square feet and has 15 resin silos with total storage of 3 million pounds, as well as its own rail spur. The site currently has eight employees and is looking to add more.

LyondellBasell picked up the site as part of its deal for A. Schulman Inc. in 2018. It had been vacant for about a year until the Antek Madison offer. Antek Madison now plans to install more blending capacity in Stryker, officials said.

In a sustainability-driven deal, Teknor Apex Co. acquired PVC recycler Nu-Pro Polymers Inc. Nu-Pro of Wheeling, Ill., makes reprocessed and recycled flexible PVC compounds. Officials with Teknor Apex in Pawtucket, R.I., said those materials "provide a reliable and new sustainable material option."

Teknor Apex Executive Vice President Lou Cappucci said the Nu-Pro deal "will further enable us to develop innovative compounds that meet the performance and sustainability requirements of our customers."

Nu-Pro's PVC compounds incorporate up to 90 percent post-industrial content, according to co-owner Don Brown. The Nu-Pro acquisition is the first for Teknor Apex since late 2021, when it purchased Lanier Color Co., a specialty compounder and color concentrates maker in Gainesville, Ga.