Materials supplier PolyOne Corp. (Avon Lake, OH) announced today that it has entered into a definitive agreement to sell its Performance Products and Solutions (PP&S) business to SK Capital Partners for $775 million in cash. PolyOne said that it expects to record a pre-tax gain of approximately $600 million at the time the sale is completed, which is expected to be in the third quarter of 2019.
PP&S is a global provider of formulated PVC and polypropylene-based solutions, as well as contract manufacturing services, primarily serving the North American construction and automotive end markets. The business reports annual sales of approximately $700 million.
SK Capital is a New York–based private investment firm focused on the specialty materials, chemicals and pharmaceuticals sectors.
PolyOne determined that divesting the PP&S business to SK Capital Partners would provide “greater flexibility to accelerate our specialty growth strategy and is in the best interest of customers, employees and shareholders,” said Robert M. Patterson, Chairman, President and CEO. He added that proceeds from the sale in the short time will be used to pay down debt on the company’s revolving line of credit and reduce its overall net debt-to-EBITDA leverage. "Longer term, we can further refine our focus on investing in and growing our three remaining segments: Specialty Engineered Materials; Color, Additives, and Inks; and Distribution,” said Patterson in a prepared statement.
The company noted it expects full year 2019 adjusted earnings per share from continuing operations to expand 6 to 8% over the prior year.
"We continue to benefit from recent investments made in composites and other sustainable solutions, which is helping us to deliver adjusted EPS growth in an otherwise challenging environment," said Patterson. "As discussed on our second quarter conference call, margins are expanding as a result of improved mix, pricing and cost reductions."