Malmo, Sweden-based HEXPOL has acquired Preferred Compounding of Copley from private equity firm Audax Group for $232 million.
Preferred Compounding was the second-largest rubber compounder in North America – behind Hexpol — with 2018 sales of about $240 million. It has 540 employees at five U.S. factories and one in Mexico.
The acquisition, being made in cash and on a debt-free basis, will be funded by a combination of cash, existing bank facilities and a new credit facility.
The acquired business has an EBITDA margin well below the HEXPOL Group and is expected to have a positive impact on earnings per share.
Integration will start immediately, and possible restructuring and cost synergies will be evaluated and communicated separately at a later stage.
“This acquisition will strengthen our global positions in advanced polymer compounds with improved supply chain, cutting-edge expertise in polymer materials and solid knowledge of applications," HEXPOL Group CEO Mikael Fryklund said in a statement. "We would like to thank Mr. Ken Bloom, Preferred Compounding CEO, for the development of a well-run organization. I wish him all the best as he continues to pursue other professional interests."
Boston-based Audax partnered with company management to buy Preferred Compounding from Dallas PE firm Wingate Partners in 2016.