Materials firms, brands changed hands in 2021

Some well-known materials brands, including Santoprene and Kraton, changed hands in the second half of 2021.

Celanese Corp. acquired the Santoprene-brand thermoplastic vulcanizate business of ExxonMobil Corp. for $1.15 billion. The acquisition includes a TPV product portfolio, along with intellectual property, production and commercial assets.

According to Celanese Senior Vice President Tom Kelly, the acquisition "substantially strengthens our existing elastomers portfolio, allowing us to bring a wider range of functionalized solutions into targeted growth areas including future mobility, medical and sustainability."

The Santoprene unit is a leading global producer of TPV serving automotive and other markets. As part of the transaction, Celanese will acquire all customer and supplier contracts and agreements and world-scale production plants in Pensacola, Fla., and Newport, Wales, with more than 400 million pounds of combined annual production capacity.

In an all-cash deal, DL Chemical Co. Ltd. acquired Kraton Corp. for $2.5 billion. Houston-based Kraton is a maker of styrenic block copolymers, pine-based biomaterials and related products. DL of South Korea was known previously as Daelim Industrial Co. Ltd. As Daelim, DL bought Kraton's Cariflex-brand isoprene rubber business for $530 million in late 2019.

Major changes also are on the way for DuPont Co. and Trinseo, with both looking to sell plastic assets even as they made plastics-related deals.

DuPont bought composites firm Rogers Corp. for $5.2 billion in the second half of 2021. DuPont said Rogers' value-added products, such as high-frequency circuit materials, will offer it a competitive edge. Rogers has a workforce of more than 3,500 employees and operates 14 manufacturing sites. Its 2021 expected sales are approximately $950 million.

Officials with DuPont in Wilmington, Del., said the firm is looking to sell several brands, including Zytel nylon 6/6, Delrin acetal resins, Hytrel thermoplastic polyester elastomers, Crastin polybutylene terephthalate, Vamac ethylene acrylic elastomers and Tedlar polyvinyl fluoride.

Combined, these businesses represent approximately $4.2 billion in sales based on full-year 2021 estimates. Officials said the restructuring moves are part of DuPont's strategy to focus on high-growth, high-margin businesses.

Nylon is a major part of DuPont's history. The firm began commercial production of nylon 6/6 fiber in December 1939, at a newly built plant in Seaford, Del., about 90 miles from company headquarters in Wilmington.

Trinseo of Berwyn, Pa., is selling its styrenics businesses, including a major polystyrene resin operation. The firm also made a major second-half deal when it acquired acrylic sheet maker Aristech Surfaces LLC for $445 million. Trinseo officials described Aristech as "a leading North America manufacturer and global provider of [acrylic] continuous cast and solid surface sheets, serving the wellness, architectural, transportation and industrial markets." According to a recent Plastics News ranking, Aristech is North America's 46th-largest film and sheet maker, with annual sales estimated at $175 million. The firm employs 450 at two production sites.

The planned sale would include Trinseo's feedstocks and polystyrene reporting segments, as well as its 50 percent ownership of North American PS maker Americas Styrenics LLC, a leading North American PS maker that is a joint venture between Trinseo and Chevron Phillips Chemical Co.

Well-known compounder Star Plastics Inc. also found a new owner in the second half of the year, when it was acquired by Akoya Capital Partners. President Doug Ritchie founded Star in 1988.

Akoya is a Chicago-based private equity firm. Its current portfolio includes nine manufacturing and service companies. Plastics-related businesses owned by Akoya include Beacon Manufacturing Group, which does some injection molding work, and Trinity Technology Group, which makes specialty fluoropolymer film.

Chroma Color Corp. and Teknor Apex Co. each made multiple first-half deals. Chroma's Epolin unit bought dyemaker Adam, Gates & Co. LLC of Hillsborough, N.J. Chroma also snagged J. Meyer & Sons Inc., a West Point, Pa.-based maker of color masterbatch concentrates for the medical and pharmaceutical markets.

J. Meyer traces its history to 1883, when it was founded as a toy importer from Germany. Chroma, part of New York investment firm Arsenal Capital Partners' portfolio, now has made nine deals in last than four years.

Teknor Apex of Pawtucket, R.I., acquired the dry color business of Dorum Color Co. of Akron, Ohio, and then added Lanier Color Co. of Gainesville, Ga. The Dorum deal is an asset purchase, with Dorum customers now supplied from a Teknor Color plant in Henderson, Ky.

Gainesville, Ga.-based Lanier makes color concentrates and specialty compounds, with a focus in the building and construction market. In a news release, Teknor Apex President Suresh Swaminathan said that Lanier's "focus on superior quality and customer centricity directly aligns with our approach."

The number of resin, color and compounding deals grew more than 40 percent from 51 in 2020 to 72 in 2021, according to P&M Corporate Finance in Southfield, Mich. Market watchers expect that growth to continue in 2022.

"Compounders are buying businesses for market fit or geography, even as selling prices continue to rise," said Bill Ridenour, president of Polymer Transaction Advisors Inc. in Foxfire, N.C.

Edward van de Krol, a director at MBS Advisors Inc. in Florence, Mass., added that niche-oriented deals "are still of interest to strategic buyers. … It's a dynamic field, and we should see more deals this year."

MBS was involved in two second-half materials deals. The firm represented graphene supplier NanoXplore Inc. of Montreal in its $9.3 million acquisition of recycling compounder Canuck Compounders Inc. of Cambridge, Ont., and represented Carbondale, Pa.-based Dyvex Industries Inc. when that business was sold to specialty materials firm Protech Group of Montreal.

In other noteworthy second-half materials deals:

• Palmerston, Ontario-based Trusscore bought the assets of Westech Building Products Inc. from Houston-based Westlake Chemical Corp. Trusscore makes PVC-based wall and ceiling panels and needed machines and manpower. Westech extrudes PVC profiles for windows, doors and other products, including a dock and deck system.

• Schiphol, Netherlands-based AOC Resins, a maker of unsaturated polyester resins, vinyl ester and other materials, was sold by CVC Capital Partners to Dallas-based Lone Star Funds.

• In a bioplastics deal, PHA producer Danimer Scientific Inc. acquired Novomer Inc., a biotechnology company with proprietary technology, in a cash transaction valued at $152 million.

• Westlake was involved in another deal when it bought Dimex LLC, a Marietta, Ohio-based manufacturer of recycled compounds and products with annual sales of about $100 million.

• In a deal between two active plastics investors, Wind Point Partners sold compounder Aurora Plastics LLC to Nautic Partners. Aurora is a compounder of PVC and thermoplastic elastomers based in Streetsboro, Ohio. Nautic of Providence, R.I., made the acquisition in partnership with Aurora management.

• French compounder Benvic Group entered the U.S. market by acquiring Princeton, N.J.-based materials firm Chemres LLC for an undisclosed price. Officials said that the Chemres acquisition will allow Benvic to strengthen its exposure to the medical sector, allowing the firm to become a key global supplier in that market. Benvic quickly followed the Chemres deal in early 2022 by acquiring Trinity Specialty Compounding of West Unity, Ohio. Benvic now has made 10 acquisitions in four years.

• Frequent plastics investor Spell Capital Partners LLC purchased Duromer Products Pty. of Australia and DuroColour Vietnam Ltd. of Vietnam. Duromer makes polymers and custom compounds. DuroColour is a regional manufacturer of masterbatch colorants for the automotive, construction and textiles markets.

• Materials maker Polytek Development Corp. acquired Specialty Resin & Chemical LLC for an undisclosed price. Easton, Pa.-based Polytek makes specialty polymers for coating, mold making and casting applications, and it is owned by investment firm Arsenal Capital Partners of New York. Specialty R&C of Dowagiac, Mich., makes polyurethanes and epoxy resins for mold making, casting and coating products.

• European PVC maker Kem One Group was sold to financial giant Apollo Global Management. Apollo of New York bought Kem One of Lyon, France, from Alain de Krassny, the firm's president and majority owner. Kem One operates almost 2 billion pounds of annual PVC resin capacity and makes related products at eight sites in France and Spain. The 1,400-employee firm was spun off from Arkema Group in 2014.

• Eastman Chemical Co. made a downstream move by acquiring Matrix Films LLC. Holliston, Mass.-based Matrix markets PremiumShield-brand performance films, including an extended line of automotive film patterns.

• Materials supplier Epsilyte Holdings LLC grew in expandable polystyrene with its acquisition of StyroChem Canada Ltd. Epsilyte purchased StyroChem from PMC Capital Partners LLC of Sun Valley, Calif., which had owned StyroChem since 2019. StyroChem's headquarters is in Baie d'Urfe, Quebec. Its EPS is used in the packaging, food service and construction markets. Epsilyte, based in The Woodlands, Texas, is owned by Los Angeles-based private equity investment firm Balmoral Funds LLC and management.

• Niche Polymer acquired Westchester Plastics and Fluoropolymer Products, two businesses based in Nesquehoning, Pa. Niche is part of a group of companies owned by the Naik family that operate in plastics recycling and compounding. Fluoropolymer Products specializes in heat exchangers. Westchester Plastics, also known as Ametek Westchester, is a toll compounder of engineering resins, alloys, blends and reactive modifiers.

• PolyQuest Inc. acquired the U.S. division of Faith Group Co. in a move that expands its resin distribution business. PolyQuest of Wilmington, N.C., is a major PET resin distributor. Faith Group Co. was founded in 1993 with a focus on trading PET and has expanded over time to include other resins.

• In another resin distribution deal, Bamberger Polymers acquired Kolm Polymers Ltd. of The Woodlands, Texas.

• Ascend Performance Materials of Houston made its first Latin American deal by purchasing a compounding plant in central Mexico owned by DM Color Mexicana SA de CV.

• Extrusion firm Pexco LLC made an upstream move by acquiring Performance Elastomers Corp. of Ravenna, Ohio. PEC makes dense and sponge elastomer products, including both rubber-based and thermoplastic elastomers. The deal is Pexco's ninth overall since 2018. The firm was No. 19 in the most recent PN ranking of North American pipe, profile and tubing extruders, with estimated sales of $250 million.