One Rock Capital Partners has completed its acquisition of Nexeo Plastics, the plastics distribution business of Nexeo Solutions, for $640 million. The valuation multiple for this transaction appears later in this article.
The sale of Nexeo Plastics to One Rock was announced on February 11th but closing was dependent of the completion of Univar’s $2 billion acquisition of Nexeo Solutions. This transaction closed on February 28th. Univar Solutions (NYSE: UNVR) is a chemicals and ingredients distributor headquartered near Chicago in Downers Grove, IL (www.univarsolutions.com).
Nexeo Plastics is a distributor of plastics, including polymer products and engineered resins, to customers in more than 60 countries in North America, Europe and Asia. The business, led by CEO Shawn Williams, is headquartered near Houston in The Woodlands, TX (www.nexeoplastics.com).
“Our partnership with One Rock and new structure as a pure-play plastics distribution business will allow us to focus our talent and resources on expanding our service offering for our suppliers and customers worldwide,” said Mr. Williams.
“We see tremendous growth opportunity for Nexeo Plastics as a stand-alone plastics distribution business,” said Tony Lee, a managing partner of One Rock. “Our team looks forward to working alongside management to deepen the company’s relationships with customers and supplier partners.”
The company’s products include acrylonitrile butadiene styrenepolystyrene; polyvinyl chloride; thermoplastic elastomers, polyurethanes, and alloys; styrene acrylonitrile; nylons; and plastomers. The company’s products are used in injection molding, extrusion, rotational and blow molding applications in the automotive, compounding, healthcare, packaging, wire & cable, sports and recreational vehicles, lawn and garden, and electronics sectors.
Nexeo Solutions posted plastics revenues of nearly $2 billion in the fiscal year ended September 30, 2018, with an annual EBITDA run rate estimated at $84 million. With a purchase price of $640 million, this results in an EBITDA valuation multiple of 7.6x for Nexeo Plastics.
“One Rock’s operational support and deep knowledge of the plastics and distribution industries will enable us to further enhance Nexeo Plastics’ capabilities and unlock the company’s full potential,” said Scott Spielvogel, a One Rock managing partner.
One Rock invests in companies that are active in the chemicals and process industries; specialty manufacturing and healthcare products; business and environmental services; and food manufacturing and distribution. One Rock has a strategic relationship with Mitsubishi Corporation which provides resources to One Rock and its portfolio companies. The firm was formed in 2010 by Tony Lee and Scott Spielvogel and is based in New York (www.onerockcapital.com).
© 2019 Private Equity Professional | April 1, 2019
