PolyOne Corp. has agreed to buy Clariant’s global color and additive masterbatch business. In addition, PolyOne has entered into an agreement with Clariant Chemicals India Ltd. to purchase its color and additive masterbatch business. The combined net purchase price is $1.45 billion, representing an 11.1 times-multiple of last 12 months-adjusted EBITDA, or 7.6 times, including anticipated synergies.
"This will be a truly transformational acquisition for both PolyOne and Clariant customers and employees around the world,” PolyOne Chairman, President and CEO Robert M. Patterson said in a statement. “Together, we will benefit from the combined ingenuity, passion and expertise of two global leaders in color design, additive technologies and sustainable solutions.
Clariant's color and additive masterbatch business, which had sales of $1.15 billion for the last 12 months, includes specialty technologies and solutions for high-growth global end markets, such as consumer, packaging and health care. The Clariant business includes 46 manufacturing operations and technology centers in 29 countries and approximately 3,600 employees who will join PolyOne's Color, Additives and Inks segment.
Patterson added: "Over the years, we have invested heavily in commercial resources and innovation, emphasizing higher-margin specialty business in less-cyclical end markets. With this acquisition and the recent divestiture of our Performance Products & Solutions (PP&S) segment, we now expect over 85% of pro forma adjusted EBITDA to be generated from specialty applications.”
"The early synergies and EPS accretion certainly underpin the transaction and its initial value financially, but what I am most excited about is the additional upside from the innovation opportunities of our combined businesses. Although we are several years into our specialty journey, we should all view this as a landmark acquisition, with our best days to come."
The acquisition of Clariant's color and additive masterbatch business has been approved by the companies’ boards and is expected to close in the middle of next year as it is subject to the satisfaction or waiver of customary closing conditions, including the receipt of regulatory approvals in various global jurisdictions.
Committed financing for the acquisitions is being provided by Citi, Morgan Stanley & Co. LLP, and Wells Fargo. Jones Day served as outside legal counsel to PolyOne.
PolyOne, with 2018 revenues of $2.9 billion, is a provider of specialized polymer materials, services and solutions.