Linking with Ravago, M. Holland will maintain its brand, culture

The COVID-19 pandemic played a role in resin distributor M. Holland's decision to seek out an investment partner.

Ravago Group acquired a majority stake in M. Holland Co., in a deal announced Aug. 22.

"We already had been working on growing and changing and looking at the long-term future of the company," Ed Holland explained. "But during the pandemic, we understood that the global market was changing and that we needed to change as well."

"The market had started to mature a bit. Cycles were getting bigger and longer. Evolution started to accelerate. Global logistics became challenged and parts of the supply chain were exposed," Holland said in an interview with Plastics News.

Ed Holland is chairman and CEO of the family-owned company. He and Marc Fern, the president and chief operating officer, will continue to lead the company.

Fern, who was also on the video call with Plastics News, said the pandemic "showed the importance of being a great global company." Ravago "has great digital and global abilities," he added. "We can grow faster with them."

Ravago's practice of letting previous acquisitions continue to operate independently also played a role in M. Holland's decision, Ed Holland said.

"We'll maintain our brand, our culture and our people," he added. "That was one of the most critical parts of why we chose this direction. Ravago is a builder of businesses, not just a consolidator."

The ability to stay independent "was built into the decision," Fern added.

Looking ahead, Ed Holland said that he's "excited to learn lessons we can draw from (Ravago) and the things they can learn from us."

"This is a case of one plus one being more than two," he added. "It's good for us and our employees long term and will help us improve the company. It's going to create opportunities for a better client and employee experience."

Ravago already ranks as North America's largest resin distributor. Northbrook, Ill.-based M. Holland is one of the five largest, according to industry estimates. Both companies have been growing both organically and via acquisition.

Market watchers contacted by Plastics News weighed in on the potential impact of the M. Holland/Ravago deal.

Bill Ridenour, who worked with M. Holland on four of its acquisitions, said that the firm "is as well managed as any plastics company we have known." Ridenour is president of Polymer Transaction Advisors in Foxfire, N.C.

He added that M. Holland's management team "is both deep and strong" and that Ravago "has an equally strong reputation. … I'm sure that Ravago and M. Holland will find ways to work together in North America, Europe and elsewhere."

The M. Holland/Ravago deal "brings into Ravago's fold one of the largest distributors in the region, which I think is a sound move for M. Holland in current market conditions," said Esteban Sagel, principal with Chemical & Polymer Market Consultants in Houston.

Sagel added that North American polyethylene and polypropylene resin demand is down 5-10 percent so far in 2023. As a result, he said, consolidation in resin distribution "provides better purchasing power and can help improve the likely reduced margins that distributors are probably obtaining at this time."

But Sagel also said that the deal could have a negative impact on processors, since Ravago already owns several distributors and now will be adding M. Holland.

"It should be expected that Ravago will explore synergies from this consolidation (with M. Holland), which can result in changes in commercial conditions for processors," Sagel said.

Howard Rappaport, senior adviser with financial firm Stone X in New York, said that M. Holland "has done an excellent job over the last several years of expanding their business in terms of volume, geography, product lines and services."

Rappaport added that the firm "has also been successful at creating a customer-focused culture as they grew their team to meet the overall business needs."

"I'm sure this (recent work) helped put them on the radar screen as an emerging competitor with Ravago's large business portfolio in the U.S. and internationally," Rappaport said. "Hopefully, all the various Ravago entities can operate seamlessly in the marketplace and avoid any potential overlap or redundancies."

Both companies announced the transaction on Aug. 22. The founding Holland family will retain a significant stake in the firm. No other financial terms were disclosed.

After the transaction closes, M. Holland will continue to operate independently as a subsidiary of Ravago Group. Ed Holland said the decision to sell followed "an exhaustive review of strategic paths" and that this will "set up M. Holland for success over the next 70 years."

He called the companies "two strong, family-owned organizations."

Ravago Holdings America President and CEO Jim Duffy said that M. Holland "is a well-known and respected name in the plastics industry, and we are thrilled to welcome Ed and his entire team to the Ravago Group family of companies."

The deal marks the third time in less than five years that a major North American resin distributor has had an ownership change. In early 2019, private equity firm One Rock Capital Partners paid $640 million for Nexeo Plastics of The Woodlands, Texas.

Then in late 2022, Miami-based HIG Capital acquired Avient Corp.'s resin distribution unit in a $950 million all-cash deal. That business now operates as Formerra.

Both M. Holland and Ravago have grown through acquisitions in recent years. M. Holland made its first acquisition in late 2012 when it purchased Christler Chemical & Plastics Inc., a distributor of engineering and commodity thermoplastic resins based in Wilsonville, Ore.

M. Holland made four acquisitions from 2012-17, with the last being its deal for T&T Marketing of Andover, Mass. Today, M. Holland has annual sales of more than $1.5 billion and more than 4,000 global customers.

Ravago's first big North American move came in 2006 when it acquired a majority stake in H. Muehlstein & Co. The firm then launched into a series of deals, including acquisitions of North American distributors Amco Polymers, Entec Polymers and Channel Prime Alliance.

Ravago partnered with solid waste management giant Republic Services Inc. of Phoenix earlier this year to form Blue Polymers L.L.C., a joint venture that will build plants that generate 100 percent post-consumer resins.

M. Holland distributes materials for almost 30 suppliers, while Ravago's North American business units represent a similar number. Material suppliers represented by both firms include BASF, Braskem, Celanese, Chevron Phillips, Nova Chemicals, Covestro, ExxonMobil and Westlake.

Ravago, based in Luxembourg with U.S. headquarters in Orlando, Fla., distributes, resells, compounds and recycles plastic raw materials at more than 325 locations across more than 55 countries worldwide. It employs 8,000 at 45 manufacturing facilities, including 19 recycling and compounding plants in North America, Europe, Asia and Africa with a combined annual capacity of about 1.7 billion pounds.

M. Holland sells more than $1.5 billion in materials to more than 4,000 customers annually. The firm serves more than 70 countries across North America, Latin America, Europe, the Middle East and Asia, and it has offices in the U.S., Mexico, Puerto Rico and the Netherlands.