The silicones market has been volatile throughout 2018, with material supply remaining tight and prices moving upward. These market conditions also may have helped the remnants of the originators of the industrial silicone industry find a willing group of buyers for its business.
Momentive Performance Materials Inc. includes the silicone business first started by General Electric Co. It was in 1940 that GE research chemist Eugene Rochow discovered the direct reaction process that "began the journey of scientific innovation that has led to the application of silicones in thousands of products," according to a Momentive news release in 2015 marking the 75th anniversary of the discovery.
GE Silicones remained a force for decades, including its efforts to push the development and marketing of liquid silicone rubber. But GE's 2006 sale of its Advanced Materials Division to private equity firm Apollo Management L.P. brought about the name change to Momentive.
Since then, Momentive Performance Materials has seen its fortunes rise and fall. Ownership has shifted; there was a prolonged strike at its main silicones production site in Waterford, N.Y.; the firm shut down silicone production in Leverkusen, Germany; Momentive went through Chapter 11; and it postponed two initial public offerings, the last pulled in November 2017 because of "adverse market conditions."
But Momentive received a good deal of interest from the investment community during that IPO effort, which may have played a role in leading to the announced intention of a group of South Korean companies to purchase parent company MPM Holdings Inc. for about $3.1 billion.
Since pulling the IPO at the end of last year, Momentive reported much-improved financial results during the first half of 2018. Revenues for the period jumped nearly 20 percent to $1.36 billion, and its net income of $59 million compared to a loss of $11 million for the first six month of 2017.
Besides its silicones and silanes offerings, Momentive also boasts operations that make fused quartz and specialty ceramics products. As a group, the purchasers find synergies in all of Momentive's businesses.
So while the market may have frowned on its IPO a year ago, that may have positioned Momentive to cash in even more this time around.