BERWYN, Pa.—Rubber latex and polystyrene producer Styron L.L.C.—which is changing its name to Trinseo S.A. later this year—is planning an initial public offering of stock.
Dow Chemical Co. sold Styron—its market-leading styrenics business to private equity firm Bain Capital L.L.C. last year for $1.6 billion. The company is based in Berwyn, Pa.
In a filing with the Securities and Exchange Commission, Styron said it plans to sell up to $400 million in ordinary stock through an IPO. The company plans to use part of the proceeds to repay debt. No date for the IPO has been disclosed.
“Styron has delivered strong results and has positive growth momentum,” a Styron spokeswoman said. “By going to the public markets, we can continue to build on that.”
Styron makes styrene-butadiene latex and synthetic elastomers, polystyrene, ABS, SAN polymers, expanded PS and polycarbonate. The firm posted sales of $5 billion in 2010, and employs about 2,100 at 20 plants worldwide.
The most recent materials-related IPO of companies heavily involved in the plastics market took place in late 2009 when Kraton Polymers was taken public by financial firms JPMorgan Partners LLC and TPG Capital LP. That move has worked out well for investors, as Kraton's per-share stock price debuted at less than $14, but was near $39 in early trading June 30.
Kraton makes thermoplastic elastomers and polyisoprene latex.
Styron may be timing its IPO right, since the global economy appears to be in the early stages of recovery, said Michael Sison, a stock analyst with KeyBanc Capital Markets in Cleveland.
“Chemical companies tend to outperform in the early parts of economic recovery,” Sison said. “Year-to-date, that group [of stocks] has done fairly well. That could bode very well for Styron.”
Styron “would be an integrated chemical company with some commodity products and some specialty chemicals,” he added. “They're in the styrene/butadiene chain, which remains very tight. It's an environment that, on a fundamental basis, could allow Styron to show good results for the next several quarters.”
In PS, Styron is believed to have the world's most capacity, with a 13 percent market share. It operates three styrenic plastic plants in Europe, three in Asia, and a U.S. plant in Midland, Mich. Styron also includes Dow's 50 percent share in Americas Styrenics L.L.C., North America's largest PS maker.
Styron generates almost 60 percent of its sales from plastics—including PS, ABS and polycarbonate—with the remainder coming from emulsion polymers such as latex and synthetic rubber. Key end uses for Styron products include appliances, consumer electronics, information technology equipment and packaging.
Officials with Styron previously said that the firm's investment in its North America operations center in Midland and in other Midland facilities will be up to $13 million over the next five years.