Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • ITEC
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • International Elastomer Show
    • Women in Tire & Rubber
    • HEXPOL Sponsored Content
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Smithers webinars focus on performance materials in green tires
      Ford to close 3 plants, end production in Brazil, costing $4.1 billion
      Study: Vehicle buyers cling to familiarity amid pandemic
      Kumho launches commercial LT, performance tire lines
    • Smithers webinars focus on performance materials in green tires
      Ferentino Tyre opens Sri Lanka plant; eyes exports to U.S., Europe
      Kumho launches commercial LT, performance tire lines
      Taiwan tire makers propose settlement of import duties case
    • JobsOhio funding gives Sperry & Rice room to grow
      TRAC's Glenn Maidment caps 51-year rubber industry career
      LafargeHolcim looks to solidify U.S. presence with Firestone Building Products purchase
      Hankook Tire holding company adopts Hankook & Co. identity
    • Smithers webinars focus on performance materials in green tires
      Endurica earns prestigious Tibbetts Award from SBA
      Kuraray to raise elastomer prices again
      Synthomer optimistic, raises earnings forecast
    • Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
      IRP Medical solidifies portfolio with KDL deal
      Rubber lab services firm Ace reports record year
    • ASTM cancels April meetings as COVID-19 continues impact
      Paycheck Protection Program funding reopens Jan. 15
      Detroit Auto Show canceled; alternative event being planned for September
      Top Glove reopens COVID-hit factories with enhanced precautions
    • Jack Murphy joins Akron Dispersions
      Adriano Alfani named Versalis CEO
      Maroon Group adds to Southeast sales team
      ASTM taps rubber executive as new board member
    • Paycheck Protection Program funding reopens Jan. 15
      Taiwan tire makers propose settlement of import duties case
      Lobbying group unveils policy agenda to speed transition to EVs
      NADA, bank group to assess political contributions after U.S. Capitol siege
    • Column: Pandemic looms over everything in life, business in 2020
      Column: Lessons from the 2020 Best Places to Work
      Editorial: Silicone hit hard by pandemic, expected to bounce back
      Column: Still far way from normal
    • Effects of multiple repurposed materials for reinforcements of standard rubber compounds
      Impact of peroxide blends on the cure rate and aged properties in HNBR
      Techniques to detect long chain branching in polymers
      A comparative study looking at effects of curing kinetics and batch variation on SBR injection molding and numerical analytics
    • WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
      IEC speaker: Specialized elastomers may reduce spread of life-threatening pathogens
      Rubber Division seeking abstracts for Spring Technical Meeting
    • WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
      Rubber Division planning second Women of Rubber event
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: MonTech introduces 1,500 kN lab press
      New products: 3M introduces new durable, pliable medical adhesive
      New Products: Lanxess launches energy-efficient PU elastomer
      New Products: MonTech automates bale cutter for safety, productivity
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Smithers webinars focus on performance materials in green tires
      Ford to close 3 plants, end production in Brazil, costing $4.1 billion
      Study: Vehicle buyers cling to familiarity amid pandemic
      Kumho launches commercial LT, performance tire lines
    • Safic-Alcan extends distribution agreement with Momentive
      Momentive aims to grow silicone presence in Asia-Pacific region
      IRP Medical solidifies portfolio with KDL deal
      Rubber lab services firm Ace reports record year
    • Jack Murphy joins Akron Dispersions
      Synthomer optimistic, raises earnings forecast
      Top Glove reopens COVID-hit factories with enhanced precautions
      Malaysia electronics group to enter rubber gloves sector
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Select™: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
      Sponsored By HEXPOL Compounding
      Understanding and Selecting Performance Additives for Rubber Compounding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2020 International Silicone Conference Virtual Edition
      2020 ITEC Virtual Edition
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. Acquisition
January 16, 2020 02:32 PM

PolyOne's Clariant deal gets high marks

Frank Esposito
Plastics News
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Clariant
    PolyOne Corp.'s offer for Clariant's masterbatch concentrates unit will have a positive impact, according to market watchers.

    AVON LAKE, Ohio—PolyOne Corp.'s pending acquisition of the masterbatch concentrates business of Clariant A.G. is winning high praise from market watchers.

    Avon Lake-based PolyOne disclosed plans Dec. 19 to acquire that global business for $1.45 billion. The agreement followed months of speculation between Muttenz, Switzerland-based Clariant and Saudi Arabian conglomerate Sabic.

    The PolyOne-Clariant deal is set for completion in the third quarter and values the Clariant business at about 11 times the annual earnings before interest, taxes, depreciation and amortization (EBITDA).

    During a Dec. 19 conference call, Robert Patterson, PolyOne CEO, President and Chairman, described the acquisition as "a perfect match and one that aligns with the world's megatrends." He added that the deal is "truly transformational" for PolyOne and will make the firm a $4 billion business that will be "truly global."

    In a recent research note, market analyst Kevin Hocevar of Northcoast Research in Cleveland said 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."

    Hocevar added that his firm views the multiple that PolyOne will pay for the Clariant unit "quite favorably," since it's slightly less than the 11.9 multiple that PolyOne's stock was trading at when the deal was disclosed. PolyOne expects $20 million in run-rate synergies by the end of the first year after the acquisition and a total run rate of $60 million by the end of the third year.

    "Overall, we view these announcements very favorably for PolyOne, as we always viewed Clariant as the big M&A opportunity for the company while at the same time the core business is exceeding expectations," Hocevar said. "We believe this is a game-changing acquisition for PolyOne, which strengthens its global leadership in color/additive masterbatches with significant opportunities to create value beyond hard synergies via top-line synergies and innovation."

    'No one can touch them'

    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."

    PolyOne, in part, is funding the Clariant deal with proceeds from the $775 million all-cash sale of its Performance Products and Solutions business. That business was sold in August to private equity firm SK Capital Partners of New York. PP&S included a major PVC compounding business and had annual sales of around $700 million.

    Ridenour, president of Polymer Transaction Advisors in Foxfire, N.C., said that PVC "had been a detractor" for PolyOne, whereas the Clariant unit "will be an enhancer with long-term value."

    The PP&S business included Geon-brand PVC compounds, which were one of PolyOne's oldest legacy businesses. The materials first were made by rubber supplier B.F. Goodrich, which launched production of PVC resin and related compounds and end products in the 1920s before it began selling the materials to outside customers in the 1940s.

    The PolyOne-Clariant deal includes the sale of Clariant's global masterbatches business, with $1.1 billion in annual sales, and a separate agreement to sell the masterbatches business in India for $60 million. 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. Ridenour said it's not likely that many of those sites will be closed, since customers value fast service and production availability.

    Patterson noted that PolyOne will continue to seek out additional acquisitions in its composites operations. Company officials declined to comment further on the Clariant deal until it closes.

    For Clariant, the sale fits its recent strategy of streamlining the firm's portfolio to concentrate on three core business areas of Care Chemicals, Catalysis and Natural Resources. As part of that strategy, Clariant sold its health packaging unit to New York-based private equity firm Arsenal Capital Partners for $312 million last year.

    Clariant also expects to divest its noncore pigments business in 2020. The masterbatches unit almost was sold to Sabic in July, but negotiations fell apart as the two sides failed to reach agreement over the creation of a stand-alone specialties business that would have combined Clariant's additive and masterbatch business with parts of Sabic's engineering resins business.

    Wall Street reaction to the PolyOne-Clariant deal has been positive, sending PolyOne's per-share stock price up almost 11 percent to just under $36 on the day the deal was announced. The price was at $35.65 in early trading Jan. 14.

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • ITEC
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • International Elastomer Show
      • Women in Tire & Rubber
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION