PolyOne to buy specialty additives firm ColorMatrix
US-based specialty polymers firm PolyOne has agreed to acquire ColorMatrix, a leading global innovator in liquid colorants, additives and fluoropolymers, in a deal worth $486 million.
"I am extremely pleased to announce we've reached an agreement to acquire ColorMatrix, an exceptional and unique specialty company," said Stephen D. Newlin, CEO. "Much like our acquisition of GLS in 2008, ColorMatrix is a game-changer for PolyOne.
“With the addition of ColorMatrix, more than 50% of PolyOne's operating income will now be derived from our specialty businesses, compared to only 2% in 2005,” he added.
ColorMatrix manufactures performance-enhancing specialty additives, liquid colorant and dosing technologies that serve diverse niche markets, such as rigid beverage and food packaging, performance molding and fiber.
The company has a leadership position in technology, evidenced by an IP portfolio of 162 patents and 107 pending applications worldwide, PolyOne officials said.
Its solutions in packaging, in particular, offer customers performance attributes such as increased product shelf life, taste preservation and improved recyclability.
Furthermore, ColorMatrix is a leading global provider of colorant for fluoropolymers and provides specialty additives that support fluoropolymers' unique high-performance properties such as lubricity, high-level heat insulation, static dissipation and x-ray opaqueness.
Through its April 2011 acquisition of Gayson, ColorMatrix expanded its portfolio to include short turnaround, custom color dispersions used in silicone processing for a broad range of medical, consumer and automotive applications.
Under the leadership of CEO John Gelp, ColorMatrix achieved sales and EBITDA of approximately $196.8 million and $43.6 million respectively for the 12 months ended June 30, 2011.
"Since 2002, ColorMatrix has organically increased EBITDA at an annualized growth rate of 16%, and our purchase price of $486 million recognizes the earnings and growth potential of this specialty business," said Newlin.
"We believe we can accelerate this growth by leveraging our global scale and through additional investment in commercial resources, just as we've done with GLS."
"Not only will the acquisition of ColorMatrix accelerate our specialization strategy, it also expands our geographic presence in Asia and Brazil and creates an entry point into Russia," said Robert M. Patterson, chief financial officer.
Approximately 70% of ColorMatrix's revenues are outside North America.
PolyOne said it intends to finance the purchase price of $486 million, which includes transaction tax benefits of $10 million, with a combination of cash on hand and the addition of approximately $300 million of long term debt.
The acquisition is being made on a cash free, debt free basis, and the purchase price is subject to a customary working capital adjustment and other closing conditions.
The deal is subject to regulatory approvals and is expected to close late this year, according to the company.
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