Khandpur said in the release that he's "thrilled to join Avient and build upon the foundation of specialization and operational excellence that was established during the company's transformative years." He added that Avient "is dedicated to solving the materials science challenges of today and tomorrow for customers around the world."
The Avient board "is deeply appreciative of Bob Patterson and his leadership as CEO over the last 10 years," Fearon said. Patterson "led the company through an enormous amount of change, and in some very challenging environments," he added.
"He retires from Avient having transformed the company's portfolio to 100 percent specialty and built a foundation for even greater success," Fearon said.
"I look back on my 15 years with the company with a great sense of pride and gratitude," Patterson said in the release. "Working with our associates to create a great place to work culture was an honor, as we served customers and helped to positively and sustainably impact our world."
Under Patterson, Avient made some transformational moves, including two major acquisitions and two major divestitures. In 2019, the firm sold its Performance Products & Solutions unit—including a major PVC compounding business—to private equity firm SK Capital of New York for $775 million. That business now operates as Geon Performance Solutions in Westlake, Ohio.
Avient followed that deal in 2020 by acquiring the masterbatches unit of Clariant A.G. for $1.4 billion. That deal included 46 global manufacturing sites and technology centers and about 3,500 employees.
In 2022, Avient made two major deals. In April, the firm acquired DSM's protective materials business—including Dyneema-brand fiber—for nearly $1.5 billion. That transaction included all of DSM's protective materials activities, including Dyneema, an ultrahigh-molecular-weight polyethylene and the strongest human-made fiber in the world. The acquired business includes six production facilities, four research and development centers and approximately 1,000 employees.
Then in August, Avient sold its resin distribution unit—one of the largest in North America—to private equity firm HIG Capital for $950 million in cash. The unit distributes resin and compounds for 21 suppliers, including Dow Inc., BASF S.E. and LyondellBasell Industries. HIG Capital now operates the unit as Formerra in Romeoville, Ill.
But Avient's recent financial results have been challenging. For full-year 2022, the firm's profit fell 46 percent to just under $83 million, even as sales grew more than 2 percent to $3.4 billion. Through the first nine months of 2023, Avient's total sales were down almost 8 percent to $2.4 billion vs. the same period in 2022, with profit down 70 percent to $47.8 million.
As of late trading Nov. 13, Avient's per-share stock price was down more than 5 percent to $32.20 so far in 2023. The price began the year near $34 and peaked above $44 in late February. Longer-term, the price was near $56 in late 2021, but since that point has been no higher than $52.40, a level it reached in early 2022.
Avient is one of North America's largest producers of compounds, concentrates, composites and protective fibers. The firm posted sales of $3.4 billion in 2022.
Avient said in a filing that with the U.S. Securities and Exchange Commission that Khandpur, 56, will receive the following compensation as president and CEO:
- A base salary of $1.05 million per year.
- Beginning in 2024, participation in the company’s annual cash incentive program for executive officers, “with a target award equal to 120% of his earned annual base salary, and with payment (from 0% to 200% of target) generally based on actual performance.”
- Also starting in 2024, participation in the company’s long-term equity incentive program for executive officers, “with a target opportunity equal to 440% of his annual base salary.”
- Participation in the company’s other standard benefits and perquisites for its executive officers, including eligibility for relocation services.
His sign-on compensation comprises a cash payment of $1.5 million and a grant of restricted stock units valued at about $5 million “that will generally vest in substantially equal installments on each of the first four anniversaries of the grant date,” according to the filing.
As special adviser, Patterson will continue to receive his base salary at an annual rate of $1.17 million, according to the SEC filing. He will not be eligible for an annual incentive program award or a long-term incentive program grant in 2024. However, the filing noted, “his 2023 annual incentive program award will be paid in accordance with its terms (to the extent earned), and his prior long-term incentive awards will continue to vest in accordance with their terms in connection with his continued employment” as special adviser.
