BERWYN, Pa.—Trinseo S.A. is adding acrylics to its lineup of products that already includes ABS, polystyrene, latex and synthetic rubber. But the company is also looking for a buyer for its synthetic rubber business.
Berwyn-based Trinseo on Dec. 14 announced a $1.36 billion deal to buy Colombes, France-based Arkema S.A.'s polymethyl methacrylate (PMMA) business.
The deal includes the Plexiglas brand in the Americas, a product that has been in the news as demand surged in 2020 from fabricators making clear shielding to prevent the spread of COVID-19.
Arkema has been actively buying and selling assets as part of a strategy to become a specialty materials supplier. Trinseo said the acrylics business complements its existing offerings across several end markets including automotive, construction, medical and consumer electronics.
"Arkema's PMMA business has consistently delivered attractive margins with products serving many of Trinseo's end markets," Trinseo President and CEO Frank Bozich said in a news release. "We believe this is an excellent first step in our portfolio transformation that is expected to ultimately include the separation of some of our commodity businesses."
The PMMA business employs 860 and operates seven production sites—four in Europe and three in North America. It expects to post 2020 sales of around $620 million and earnings before interest, taxes, depreciation of amortization of around $148 million. Arkema called that "a solid performance in the context of COVID-19," noting that 2019 EBITDA was close to its historic high, at $194.5 million.
While acrylic sheet demand has been strong in 2020, Arkema has reported that hasn't been enough to offset drops from the automotive market, which shut down early in the year.
Trinseo employs 2,700, generated sales of $3.8 billion in 2019 and operates 17 production sites worldwide. Its performance plastics business makes ABS, polycarbonate and styrene acrylonitrile resins. Trinseo, then known as Styron, was spun off from Dow Chemical Co. in 2010.
Trinseo also announced that it is exploring the potential divestiture of its synthetic rubber business.
"Our synthetic rubber business is a very valuable asset and there are significant growth opportunities in the tire market. However, we believe the industry continues to evolve and there are other parties who can better capitalize on these growth opportunities," Bozich said in a news release.
Thierry Le Henaff, chairman and CEO of Arkema, said the PMMA divestiture is in line with the strategy that he presented to analysts in April.
"It will allow Arkema to continue to significantly reduce the share of its Intermediates segment and to consolidate its foothold in specialty materials with high technological content," he said.
