The PolyOne-Clariant deal is set for completion in the third quarter and values the Clariant business at about 11.1 times the annual earnings before interest, taxes, depreciation and amortization (EBITDA). PolyOne used some of the proceeds from the PP&S deal to fund its purchase of the Clariant business.
On a Dec. 19 conference call, Robert Patterson, PolyOne CEO, president and chairman, said that the Clariant deal is "truly transformational" for PolyOne and will make the firm a $4 billion business that will be "truly global."
Market watchers Kevin Hocevar and Bill Ridenour also approved of the deal. Hocevar, a market analyst with Northcoast Research in Cleveland, said in a research note that "in our opinion, [Clariant's masterbatch business] has always been the holy grail for PolyOne, as it combines the company with its largest color/additive competitor … creating the unmatched global leader in the space."
Plastics M&A veteran Bill Ridenour said in an interview with Plastics News that the PolyOne-Clariant deal is the best acquisition that PolyOne has made since its 2000 formation from the merger of Geon Corp. and M.A. Hanna Co.
"This acquisition makes PolyOne the overwhelming leader in specialty masterbatches in the world," he said. "No one can touch them."
Ridenour, president of Polymer Transaction Advisors in Foxfire, N.C., added that PVC "had been a detractor" for PolyOne, whereas the Clariant unit "will be an enhancer with long-term value."
The PolyOne-Clariant deal includes the sale of Clariant's global masterbatches business, with $1.1 billion in annual sales. Major markets served by the Clariant business include consumer, packaging and health care.
With the Clariant operations, PolyOne will add 46 manufacturing sites and technology centers in 29 countries and about 3,600 employees. They will be added to PolyOne's Color, Additives and Inks segment.
PVC buyer SK, meanwhile, had become a major player in plastic additives through its acquisitions of part of Chemtura in 2013 and of SI Group in 2018. SK had operated the Chemura businesses as Addivant. The combined additives firm operates as SI Group.
Other major second-half materials deals included:
- Essex, England-based Synthomer P.L.C. buying specialty chemical company Omnova Solutions Inc. in a deal worth about $455 million. Synthomer's offer of $10.15 per share was a premium of 58 percent to Beachwood, Ohio-based Omnova's closing price of $6.42 per share at the time the deal was announced.
- Domo Chemicals GmbH acquired the European specialty nylon business of Solvay for $334.2 million. The deal allowed Brussels-based Solvay to complete the $1.78 billion sale of its larger overall nylon unit to BASF SE of Ludwigshafen, Germany. The Domo-Solvay transaction includes manufacturing sites in France, Spain and Poland.
- Materials firm RTP Co. of Winona, Minn., acquired the Zeotherm-brand thermoplastic vulcanizate product line from Zeon Chemicals LP. The deal includes all products sold globally under the Zeotherm TPV name. The Zeotherm acquisition "is just the latest step in our rapidly expanding thermoplastic elastomer business," RTP officials said.
- Global colorant provider Chromaflo Technologies Corp. made its second international acquisition in less than a year, buying Liquid Colours (Pty.) Ltd. of South Africa for an undisclosed price. Officials with Ashtabula, Ohio-based Chromaflo said the deal "further enhances (the firm's) position in the sub-Saharan African region." Liquid Colours' colorant dispersion division includes pigment dispersions and colorant technologies for decorative paint point of sale, in-plant systems, industrial coatings and other applications.
- New York private equity firm Jordan Co. acquired Polymer Solutions Group's Polymer Additives division—previously Flow Polymers of Cleveland—from fellow New York investment firm Arsenal Capital Partners. The sale comes after a hold period of close to four years.