SK Capital has agreed to acquire the performance products and solutions business (PPB) of PolyOne Corporation for approximately $775 million.
PPB is comprised of Geon Performance Materials, a maker of polyvinyl chloride (PVC) compounds; and Producer Services, a maker of a range of formulated polypropylene and thermoplastic polyolefin products, and a provider of contract manufacturing services. PPB has twelve manufacturing locations across North America and Asia and has approximately 1,100 employees. PPB has annual sales of approximately $700 million and its products are sold to companies that are active in the construction and automotive end markets.
Geon dates back to 1927 when BFGoodrich discovered and produced the first usable vinyl polymer. In 1948 the company created a vinyl plastic division based on this technology and later, in 1993, spun off the division through a public offering creating Geon.
“PPB is a market leader with a rich heritage in the PVC and polypropylene compounding industry,” said Jack Norris, a managing director of SK Capital. “We are excited about the opportunity to further strengthen the business through both growth and improvement initiatives, similar to how we’ve approached several other investments that were corporate carveouts.”
SK Capital invests in the specialty materials, chemicals and pharmaceuticals sectors and typically invests equity of $100 million to $200 million in each portfolio company. In February 2019 the firm held a final closing of SK Capital Partners Fund V LP with total committed capital of $2.1 billion. The firm’s earlier fund was raised in 2014 with $1.0 billion of capital. SK Capital is headquartered in New York (www.skcapitalpartners.com).
PolyOne Corporation (NYSE: POLY) is a provider of materials and services including specialty polymer formulations, color and additive systems, polymer distribution and specialty vinyl resins. The company had revenues in 2018 of $3.5 billion and has 60 manufacturing sites and 9 distribution facilities in North America, Europe, Asia and South America. PolyOne, headquartered near Cleveland in Avon Lake, OH, was formed in 2000 from the merger of M.A. Hanna Company and The Geon Company (www.polyone.com).
“We conducted what became a very competitive bidding process for our PPB segment,” said Robert Patterson, the chairman, president and CEO of PolyOne. “Ultimately, we determined that divesting the business to SK Capital Partners would provide greater flexibility to accelerate our specialty growth strategy and is in the best interest of customers, employees and shareholders.”
Committed debt financing for this acquisition is being provided by Cerberus Business Finance.
HSBC was the financial advisor to PolyOne on this transaction which is expected to close in the fourth quarter of 2019.
© 2019 Private Equity Professional | August 19, 2019