BERWYN, Pa.—Trinseo S.A. has reached an agreement to sell its synthetic rubber business to Poland's Synthos S.A. in a deal valued at $491 million.
Berwyn-based Trinseo said in a May 21 news release that the sale includes $449.4 million in cash and the assumption of $41.6 million in pension liabilities. It expects net cash proceeds of about $400 million after transaction-related costs and taxes. The sale is subject to customary closing conditions and regulatory approvals and is expected to close in 2022.
The global materials company—which also is a maker of plastics and latex binders—has been shopping its SR business, and President and CEO Frank Bozich said during a May 7 conference call to discuss its first-quarter financials that it was making progress on selling the unit, allowing Trinseo to focus on engineered materials.
Trinseo's SR business includes about 440 employees, mostly at its operation in Schkopau, Germany. The staff is expected to join Synthos once the transaction closes. It also includes the transfer of Schkopau-based manufacturing and research and development facilities, along with related intellectual property. The business manufactures solution and emulsion SBR, with capacity to produce 200,000 metric tons of SSBR and 130 tons of ESBR in Schkopau.
For 2020, Trinseo's SR business posted sales of $320 million, down 27.4 percent from the $441 in revenue for 2019. Adjusted EBITDA was $2 million last year, compared to $41 million in 2019.
Its SR business did rebound somewhat in the first quarter of 2021, with sales climbing 22 percent to $124 million, and adjusted EBITDA up 7.7 percent to $14 million.
"In pursuing our transformation strategy toward becoming a higher margin and less cyclical specialty materials and sustainable solutions provider, we believe our best path is to focus on growth in engineered materials and CASE applications," Bozich said in a statement. "Following the acquisition of Arkema's PMMA business, the divestiture of synthetic rubber provides Trinseo with a stronger balance sheet and greater flexibility to pursue organic and acquisition growth opportunities."
Trinseo acquired Arkema's PMMA plastics and activated methyl methacrylates business on May 3. With that deal completed, the company has 24 manufacturing sites globally and approximately 3,500 employees. Its 2020 sales were about $3 billion.
Bozich added that "Synthos is well-positioned to leverage the numerous growth opportunities associated with (Trinseo's SR business) and its strategic commitment to the synthetic rubber industry makes it an ideal owner."
Synthos claims to be the largest European manufacturer of ESBR. It also produces neodymium polybutadiene rubber and high styrene rubber. Its Oswiecim, Poland, facility has the capability to produce 185,000 metric tons of ESBR annually.
That plant was hit by an explosion and fire on Jan. 7, but there were no injuries and production resumed within a week.
The Trinseo/Synthos deal is the second planned sale of an SR business in recent weeks.
Japan's energy group Eneos Corp. agreed on May 11 to acquire JSR Corp.'s elastomers business. That deal has an enterprise value of $1.06 billion for the business, which posted an operating loss of $105 million on 20 percent lower sales of $1.3 billion for the fiscal year ended March 31.
JSR's elastomer business includes a portfolio of both ESBR and SSBR, polybutadiene rubber, polyisoprene, nitrile rubber, butyl rubber, ethylene-propylene rubber and thermoplastics elastomers.