NEW YORK (Sept. 30)—Lion Chemical Capital L.L.C. has agreed to buy DSM Copolymer Inc.´s styrene-butadiene business from DSM N.V., Lion´s second major purchase in the rubber industry.
The deal, expected to close in the fourth quarter, will give Lion a company with a 60-year history, operating a plant and headquarters in Baton Rouge, La. No monetary amounts in the transaction were disclosed, and the two companies said the sale will take the form of an asset deal.
DSM Copolymer and ISP Elastomers are the only SBR producers in North America not affiliated with a tire maker.
The Baton Rouge plant provides SBR primarily to tire manufacturers, and also for use in conveyor belts, vibration dampers and footwear. As of the end of 2004, the facility employed about 200.
Lion is a private equity firm focused on investing in businesses operating in the chemical and related industries. It is led by elastomer industry veteran Peter W. De Leeuw, Lion Chemical managing director who ran the Shell Chemical Co. Kraton thermoplastic elastomers business for a number of years. He has 30 years of experience in the chemical sector.
His brother, David E. De Leeuw, also a Lion Capital managing director, has spent 30 years in investment banking, private equity and corporate finance.
In 2004 Lion bought PolyOne Corp.´s elastomer compounding and additives business for $120 million. The $400 million business was renamed Excel Polymers L.L.C.
Lion said Excel and the SBR business will be run as independent operations.
For DSM, the sale is part of the firm´s strategy to focus on life science products and performance materials. A few years ago the Herleen, Netherlands, company placed the SBR unit in a category of businesses earmarked for potential divestiture.
DSM Copolymer President Henk-Jan Koenen said DSM sought a buyer that believes in the SBR business´ and the Baton Rouge operation´s potential, which he said is fufilled by the Lion purchase.
Koenen lead an effort to improve the business—which had suffered several years of losses—through a program called "Project Restoration." Key aspects of the effort were new labor agreements, improved terms with suppliers, long-term deals with customers and a continued emphasis on safety.