AVON LAKE, Ohio—PolyOne Corp. is selling its Designer Structures & Solutions unit to private equity firm Arsenal Capital Partners for $115 million.
DSS includes most of Spartech Corp., which Avon Lake-based PolyOne acquired for almost $400 million in late 2012. The business had struggled financially and posted an operating loss of almost $4 million in 2016. The sale includes sheet, rollstock and packaging assets.
"The decision to divest DSS comes after evaluating several strategic options for the business and concluding this is the best course of action for our customers, associates and shareholders," Robert Patterson, PolyOne chairman, president and CEO, said in a June 29 news release.
He described New York-based Arsenal as "very well positioned to complete the transformation work we have begun and serve DSS customers going forward." The release did not say how many facilities or employees are affected by the sale.
"Looking back at the Spartech acquisition completed in 2013, there were a number of positive, value-creating elements of the deal," Patterson added. "These include the color concentrate and formulation assets that have seamlessly integrated into the other segments of PolyOne, as well as the beginnings of our IQ Design services which are now broadly used across the entire company."
"We intend to leverage these assets going forward, as well as seek out new investments that expand our material science, polymer formulation and world-class service capabilities."
Proceeds from the sale will be used to pay down short term borrowings and fund ongoing growth initiatives. PolyOne expects an after-tax charge of $220 million in the second quarter related to the sale.
Arsenal now has made 22 plastics-related acquisitions since 2012. Most recently, the firm in February bought part of the polyurethane foams unit of Covestro L.L.C.