Bakelite, an iconic plastics material, is included in a $425 million deal between thermoset resins maker Hexion Inc. and two financial firms.
Columbus, Ohio-based Hexion is selling its phenolic specialty resin unit, as well as hexamine and forest products resins, to financial firms Black Diamond of Greenwich, Conn., and Investindustrial of London.
The phenolics unit includes Bakelite, the first man-made thermosetting plastic, which was synthesized by Leo Baekeland in 1907.
Financially, the deal consists of $335 million in cash and assumed liabilities, with the remainder in future proceeds based on the performance of the business. The three businesses being sold posted sales of about $530 million for the twelve months ended June 30.
The businesses employ 900 at and 11 manufacturing sites globally, making phenolic specialty resins and engineered thermoset molding compounds for a wide range of end markets, including building and construction, automotive and electronics.
Hexion expects to use the sale proceeds to invest in its business and further reduce its debt, officials said.
"We continue to strategically manage our portfolio providing us the ability to further strengthen our balance sheet and maintain a strong business going forward," Chairman, President and CEO Craig Rogerson said in the release.
Officials with Black Diamond and Investindustrial added that they "are pleased to acquire these strategic assets, as these businesses boast globally recognizable brands and trademarks, including Bakelite … as well as world-class facilities and a leading research and development and technical service platform."
Black Diamond has prior experience investing in phenolic specialty resin businesses and looks forward to bringing that experience to the acquired businesses, officials said.
Hexion filed for Chapter 11 bankruptcy protection in April 2019, just before almost $70 million in bondholder interest payments were due. The firm exited bankruptcy three months later. Hexion employs 4,000 globally at 27 locations.