Nexeo parent One Rock sets materials M&A pace in first half

Investment firm One Rock Capital Partners LLC put together three materials distribution deals in the first half of 2021.

One Rock, based in New York and Los Angeles, made the deals through its GPD Cos. Inc. unit, which also includes plastics materials distributor Nexeo Plastics. One Rock acquired a majority stake in Nexeo in 2019.

In the first half of 2021, GPD acquired European distributor Distrupol, which had been part of chemicals distribution firm Univar Solutions Inc. Distrupol is based in Chertsey, England, and sells more than 4,000 grades of material to more than 1,300 customers in 13 countries.

One Rock Managing Partner Tony Lee said that Distrupol "has established a reputation for product and technical expertise, innovation and reliability among its deep network of European suppliers and customers."

One Rock/GPD followed the Distrupol deal with Nexeo's acquisition of Nevicolor SpA, a resin distributor and compounder based in Luzzara, Italy. Distrupol then acquired resin distributor Lautrup Chemicals A/S of Denmark. Officials described Copenhagen-based Lautrup as the leading distributor of polymers in Scandinavia.

Also in the first half, CarbonLite Holdings LLC found buyers for its three PET recycling plants soon after filing for Chapter 11 bankruptcy protection. Private equity firm Sterling Group and PET resin makers Indorama Ventures and DAK Americas LLC each bought one CarbonLite plant.

Los Angeles-based CarbonLite had called itself the world's largest recycler of PET bottles. The firm blamed its bankruptcy on the pandemic and economic challenges in recycling markets. The company had hoped to emerge from the financial reorganization, but that ultimately proved too difficult, forcing the plants to be sold off in auctions in federal bankruptcy court.

The CarbonLite plant in Riverside, Calif., was sold to Houston-based private equity firm Sterling for $57.5 million. The company's Dallas plant was sold to Indorama for $63 million. CarbonLite's newest plant, in Reading, Pa., was sold to DAK, which is part of Alfa SAB de CV of Monterrey, Mexico, for $96 million.

Materials firms Westlake Chemical Corp. and DuPont Co. each made big moves into downstream products in the first half. Westlake acquired the North American building products business of Boral Industries Inc. for $2.15 billion.

The all-cash deal is expected to close in the second half of 2021, officials with Westlake in Houston said. Boral Industries is a unit of Australian construction giant Boral Ltd.

Boral's North American building products businesses include roofing; siding, trim and shutters; decorative stone; and windows. The business operates 29 sites in the U.S. and Mexico and had sales of more than $1 billion for the year ending June 30, 2020.

Westlake officials said that the combination of their firm's own building products unit with Boral's product lines "creates a stronger business with significantly increased scale, greater product and geographical diversity, and enhanced growth prospects." In a presentation to investors, Westlake officials said that the Boral deal will increase its building products' share of Westlake's total sales from 28 percent to 37 percent.

DuPont acquired specialty products maker Laird Performance Materials for $2.3 billion in cash. Cleveland-based Laird is a major supplier of electromagnetic shielding and thermal management products. Plastics-related products made by Laird include gaskets, tapes, foams and microwave absorbers. The firm operates 11 global sites and posted sales of $465 million in 2020.

DuPont of Wilmington, Del., is acquiring Laird from Boston-based private equity firm Advent International. DuPont officials said that the deal strengthens the firm's leadership position in advanced electronic materials for key markets including smart/autonomous vehicles and 5G telecommunications.

Ascend Performance Materials made its fourth acquisition in less than a year, buying French compounder Eurostar Engineering Plastics for an undisclosed price. Fosses-based Eurostar has a broad portfolio of flame-retardant engineered plastics and expertise in halogen-free formulations, according to Houston-based Ascend.

Eurostar employs 60 and operates 12 extrusion lines. The firm makes compounds based on nylons 6 and 6/6 and polybutylene terephthalate, primarily for electrical/electronic uses. Ascend CEO Phil McDivitt said that Ascend "needed a fuller line in e-mobility."

McDivitt added that Ascend — a unit of SK Capital Partners of New York — will continue to look for acquisitions in the U.S. and China that fit the firm's criteria and strategy.

In a separate first-half deal, SK Capital and Heubach Group acquired the pigments business of Clariant AG, which makes materials used in many plastic products.

SK and Langelsheim, Germany-based Heubach paid $895 million. The combined business will operate under the Heubach name, creating a global pigments leader with more than $1.1 billion in annual sales.

The pigments unit being acquired is a global provider of organic pigments, pigment preparations and dyes, operating 13 global production sites and employing approximately 1,900. The deal comes almost a year after Clariant sold its masterbatches unit to Avient Corp. for $1.4 billion.

SK Managing Director Aaron Davenport said that Clariant Pigments "is a premier global colorant solutions provider and, together with our new partners … we see a tremendous opportunity to create significant value for all stakeholders."

In addition to Ascend, SK's holdings include plastics materials makers Geon Performance Solutions and Techmer PM, as well as SI Group, a specialty chemicals firm that's a major producer of plastic additives.

In June, Chroma Color Corp. acquired Color Resource LLC, a maker of color concentrates based in Leominster, Mass. It's the third in the last 18 months for McHenry, Ill.-based Chroma and the firm's fifth since mid-2018.

Color Resource makes materials for the telecommunications, fiber, building, electronics and specialty wire markets. Officials said the acquisition "significantly expands" Chroma's product offerings in wire and cable and other key market segments.

In another major deal, Celanese Corp. is acquiring the Santoprene-brand thermoplastic vulcanizate business — a well-known materials brand — from ExxonMobil Corp. for $1.15 billion.

The acquisition includes "a comprehensive TPV product portfolio, along with intellectual property, production and commercial assets and a world-class organization," officials with Celanese in Dallas said in a June 30 news release.

The Santoprene unit is a leading global producer of TPV serving the automotive, construction, appliance, medical and industrial markets. Officials described TPV as a chemically cross-linked, high-performance material that leverages a unique combination of engineering thermoplastic and elastomer properties.

In other first-half materials deals:

• Easton, Pa.-based Polytek Development Corp., a manufacturer of specialty polymers for mold making, casting and coating, acquired Endurance Technologies in South St. Paul, Minn., to expand its production footprint and capabilities. Endurance offers formulation and manufacturing with a focus on polyurethane and epoxy systems from a 40,000-square-foot manufacturing facility that also houses offices and laboratories.

• Manufacturing veteran Jennifer Bryan acquired OptiColor Inc., the compounding firm that she joined in 2012. Bryan bought Huntington Beach, Calif.-based OptiColor from Daniel Neufeld, who founded the business in 1995. Bryan had been OptiColor's sales and marketing manager and now will serve as president and CEO.

"This is the cherry on top," Bryan told Plastics News. "I've had a career goal of owning my own company."

OptiColor makes compounds based on polycarbonate, acrylic, nylon and other engineering resins for eyewear, medical, lighting and similar markets. The firm employs 35 at a 22,000-square-foot location and has annual sales of between $10 million and $15 million.

• Additives supplier Milliken & Co. acquired German compounder and concentrates maker Zebra-chem GmbH for an undisclosed price. Officials with Milliken in Spartanburg, S.C., said Zebra-chem is known for its peroxide and blowing agent masterbatches, and that the deal will increase their firm's presence in recycling markets.

• Automotive material supplier Haartz Corp. acquired a minority stake in Peak Performance Compounding LLC, a specialty compounder based in Leominster, Mass. Officials with Peak and with Haartz in Acton, Mass., said that together the firms will provide custom and toll compounding for specialty medical and industrial markets.

Peak opened in 2019 and plans to expand its manufacturing footprint in 2022 by adding a dedicated white room space for medical production. Haartz was founded in 1907 and provides materials used in automotive fabric and interior trim, including moldable skins and artificial leather. The firm employs more than 400 worldwide in the U.S., Germany, China and India.

• Canadian plastic pipe supplier Soleno of McAdam, New Brunswick, acquired Plastiques VPC, a startup recycler in Saint-Henri-de-Levis, Quebec, specializing in the recovery of oil-contaminated plastics. Officials with Soleno said that the recycling industry "is a key sector to tackle climate change, which makes this acquisition even more important."

• Epsilyte Holdings LLC, a provider of expanded polystyrene based in The Woodlands, Texas, acquired Polysource Inc., a Piqua, Ohio-based EPS compounder and molder of building insulation products, safety helmet liners and filtration media. Officials said the acquisition bolsters Epsilyte's green product offering and technical expertise.