Investment firm SK Capital stayed active in materials M&A in the second half of 2020 with two plastics-related deals.
New York-based SK in July acquired a majority stake in materials firm Techmer PM LLC for an undisclosed price.
Clinton, Tenn.-based Techmer makes engineered compounds and color and additive concentrates for plastics and fibers. SK bought the majority stake from Techmer CEO and Chairman John Manuck, along with business partners Rehrig Pacific and Tokyo Ink.
Manuck, who founded Techmer in 1981, will retain a significant ownership stake. He told Plastics News that the deal with SK will allow Techmer to continue to grow, especially in international markets.
Less than a week after the Techmer deal, SK announced it was acquiring the specialty polymers business of Baker Hughes for an undisclosed price. That business makes specialty low molecular weight olefin polymers, including a range of functional polymers and high melting point polyethylene waxes. The company has a manufacturing plant in Barnsdall, Okla.
In addition to its two second-half purchases, SK now owns compounder Geon Performance Solutions of Avon Lake, Ohio; nylon 6/6 resin maker and compounder Ascend Performance Materials of Houston; and additives supplier SI group of Schenectady, N.Y. SK's total portfolio has annual sales of about $9 billion and employs more than 10,000 globally.
Market veteran Phil Karig said that materials firms remain attractive to both private equity and strategic buyers.
"Once a private equity firm has a materials firm in-house, it can act like a strategic buyer," said Karig, managing director of Mathelin Bay Associates in St. Louis. "And strategic buyers can buy more capacity and customers faster and with less risk by acquiring an existing [materials] company than by building on their own."
Materials firms Celanese, Trinseo, Ineos and Huntsman each were involved in big-money deals in the second half as well.
After 56 years, Dallas-based Celanese ended its Polyplastics joint venture by selling its share to partner Daicel Corp. for almost $1.6 billion in cash. Celanese had owned a 45 percent stake in Polyplastics, which makes specialty plastics including acetal, polyphenylene sulfide and liquid crystal polymer. The JV was founded in 1964. Dallas-based Celanese announced the deal with Tokyo-based Daicel on July 20.
Polyplastics operates two plants in China and plants in Japan, Malaysia and Taiwan. The business also operates two plants in Germany: one making specialty polymers and one making specialty chemicals. According to its website, Polyplastics has annual acetal production capacity of almost 700 million pounds.
Berwyn, Pa.-based Trinseo in December bought the polymethyl methacrylate (PMMA) business of Arkema SA of Colombes, France, for almost $1.4 billion. The deal allows Trinseo to add acrylics to a lineup of products that already includes ABS, polystyrene, latex and synthetic rubber. Trinseo now is looking for a buyer for its synthetic rubber business.
The deal includes the Plexiglas brand in the Americas. Arkema has been actively buying and selling assets as part of a strategy to become a specialty materials supplier. Trinseo said the acrylics business complements its existing offerings across several end markets including automotive and construction.
The PMMA business being acquired employs 860 and operates seven production sites: four in Europe and three in North America.
Ineos acquired Sasol Ltd.'s stake in a Texas-based high density polyethylene resin unit for $404 million. Sasol of Johannesburg and Houston-based Ineos had been 50-50 partners in the unit, which operated as Gemini HDPE LLC in La Porte, Texas. The unit has annual production capacity of just over 1 billion pounds of bimodal high density polyethylene, primarily sold into pipe and film applications.
Huntsman acquired additives maker Gabriel Performance Products in a $250 million all-cash deal. Gabriel is based in Akron, Ohio, and makes specialty additives and epoxy curing agents for coatings, adhesives, sealants and composites. Huntsman, based in The Woodlands, Texas, acquired Gabriel from Audax Private Equity of Boston and San Francisco.
Gabriel posted sales of $106 million in 2019. The firm operates manufacturing plants in Ashtabula, Ohio; Harrison City, Pa.; and Rock Hill, S.C. Huntsman Advanced Materials President Scott Wright said that the acquisition "broadens the offering in our specialty portfolio" and is complementary to the firm's recent acquisition of CVC Thermoset Specialties.
In other notable second-half materials deals:
• Material Difference Technologies LLC acquired Houston-based plastics recycler Replas from LyondellBasell Industries. No purchase price was disclosed in the deal between MDT, a recycler and resin distributor in Sarasota, Fla., and global materials maker LBI.
Replas traces its history to Evansville, Ind.-based Matrixx Group and plastics pioneer Ray Wright. LBI had acquired the Replas business as part of its purchase of A. Schulman Inc. in 2018.
• PVC additives maker Rheogistics LLC was sold to wax supplier International Group Inc. for an undisclosed sum. Rheogistics of Picayune, Miss., makes lubricant systems for rigid PVC. Toronto-based IGI is a vertically integrated producer of custom and performance waxes.
• Materials firm Lubrizol Corp. acquired 3D printer Avid Product Development LLC for an undisclosed price. Officials with Lubrizol in Wickliffe, Ohio, said that Loveland, Colo.-based Avid "offers a unique blend" of 3D printing capabilities, including design for additive manufacturing and prototyping.
• Maroon Group, a distributor of plastic additives and other chemicals, was acquired by life science ingredients supplier Barentz International BV for an undisclosed price. Avon, Ohio-based Maroon is majority owned by private equity firm CI Capital LLC of New York. CI bought a majority stake in Maroon in 2014 and since then has grown the business by making 11 acquisitions.
Maroon President and Chief Operating Officer Mike McKenna told PN that the deal "provides an immense amount of opportunity for our team globally," since Maroon had generated more than 90 percent of its sales from North America.
• Nova Chemicals Corp. sold its expandable styrenics business to Mexican conglomerate Alpek SAB de CV for an undisclosed price. The sale includes manufacturing plants in Painesville, Ohio, and Monaca, Pa. Officials with Nova in Calgary, Alberta, said that the sale is an important step in the firm's plan to focus on its olefin and polyethylene business.