HARLOW, England—Yule Catto & Co. P.L.C. will be creating a major player in the emulsion polymers sector when its planned purchase PolymerLatex GmbH & Co. K.G. finally is approved.
Yule Catto has agreed to buy the Marl, Germany-based company from TowerBrook Capital Partners L.P. The transaction, which needs approval of both shareholders and regulatory agencies, is expected to be completed in the second quarter. Current projections put the cost of the deal at about $585 million.
A company spokesman said once the deal is complete, PolymerLatex probably will be integrated with the company's Synthomer B.V. polymer business. Combined, the two operations will have a work force of more than 2,000, he said. Annual sales of the merged operation were projected to be in the vicinity of $1.2 billion.
Both companies are well established in the emulsion polymers industry, the spokesman said, and consolidation of PolymerLatex and Synthomer will create a broader range of products, a larger research and development network, extensive manufacturing capabilities, and the opportunity to create additional business for the firm.
Once finalized, the transaction will result in “a business of great potential to our customers, our people, our shareholders and the communities in which we operate,” according to Adrian Whitfield, Yule Catto's chief executive.
While it will be some time before full details of the deal are announced, including decisions on the work force and management team, the transaction improves Yule Catto's position in the SBR latex market with the addition of European production assets and more product development capabilities. It also gives the company new end markets, the spokesman said.
In addition, Yule Catto will gain access to a modern nitrile latex facility PolymerLatex recently built in Malaysia. That, in turn, will allow Yule Catto to expand its product offerings in the synthetic latex glove market.
Over the last four years, Yule Catto, founded by Andrew Yule in 1863, has been restructuring its operation, focusing on cross margin improvement, cost cuts, improved cash generation and portfolio realignment. The Harlow-headquartered firm divested several non-core assets to concentrate primarily on its Polymer Chemicals division, which now accounts for more than 80 percent of its business.
That makes the addition of PolymerLatex a good fit, the spokesman said, because it's a leading global producer of latex products at its plants in Europe and Asia.
He said that during that span, the emulsion polymers sector has undergone a good deal of consolidation, which has stabilized production and pricing in the industry.
PolymerLatex, which has been in a growth mode for the last three years, was put on the selling block in mid-July. It was acquired by TowerBrook in 2003. The company was founded in 1996 and now has more than $500 million in annual sales.