E-shots Web-exclusive: PolyOne to acquire GLSE-shots Web-exclusive: PolyOne to acquire GLS

In November, PolyOne (Avon Lake, OH; www.polyone.com), one of the largest independent compounders worldwide, signed a definitive agreement to acquire GLS Corp. (McHenry, IL; www.glscorp.com). At the time, industry sources estimated a purchase price close to the annual sales figure of $130 million, but GLS owners, the Dehmlow family, and PolyOne declined to comment.

Several weeks later, at the time this issue went to press, principals involved in the acquisition still did not have definitive answers on purchase price. John Daggett, director of corporate communications, told IMM that while PolyOne expected the deal to close in January, both companies had entered the quiet period prior to closing. “The engagement has been announced and the wedding should take place in January,” he quipped in a recent phone interview.

All indications are that GLS will continue operations as before once the deal is finalized. Said Daggett, “GLS has a lot of expertise in technical innovation and products, and its management has achieved excellent growth. Merging their breadth of product and expertise along with our global footprint will enable the GLS portfolio to expand globally.”

Daggett also confirmed that PolyOne is transitioning to be a leading provider of specialized polymers, and that the GLS acquisition is part of that strategy. Stephen Newlin, PolyOne chairman, president, and CEO, told shareholders at a November meeting that the company will “drive innovation and shift from commodity to specialized growth markets.” He also noted that income from specialty businesses was up 60% year-over-year for the first nine months of 2007. Craig Nikrant, VP and general manager, engineered materials, told investors at the same meeting that his division intends to raise the amount of revenue from specialty products to 50% by 2011 from its current 17%. It is Nikrant's group that will incorporate GLS once the acquisition closes.

What else makes GLS such an attractive acquisition for the $2.6 billion PolyOne? For one, GLS has more than 1200 current customers globally, and it also comes with manufacturing facilities in both the United States and China. And it doesn't hurt that the company has posted double-digit revenue growth every year for the past 10 years.