• Divestment of Clariant’s entire Masterbatches business to PolyOne
• Total enterprise value of approx. USD 1.6 billion
• Extraordinary cash distribution of CHF 3.00 per share proposed by Clariant’s Board of Directors, subject to AGM approval and closing of transaction
Clariant, a focused and innovative specialty chemical company, has agreed to sell its entire Masterbatches business to PolyOne. The transaction values the Masterbatches business at USD 1560 million, representing c. 12.2 times the last twelve months reported EBITDA (ending September 2019) on a cash and debt free basis. This amount is payable at closing, which is expected by Q3 2020.
“This announcement is a significant milestone on our path to focussing on businesses with above-market growth, higher profitability and stronger cash generation. After the successful divestment of Healthcare Packaging in October 2019 the agreement to sell Masterbatches is an important step in delivering on our strategy defined in 2015 to concentrate on our three core Business Areas Care Chemicals, Catalysis and Natural Resources”, said Hariolf Kottmann, Executive Chairman of Clariant. “As announced, we are confident that we will execute the remaining divestment of our Pigments business in 2020 in order to build the new, more focused and stronger Clariant by 2021,” he added.
As previously communicated, the proceeds from the intended divestments of Clariant’s non-core businesses will be used to invest in innovations and technological applications within the core Business Areas, to strengthen Clariant’s balance sheet and to return capital to shareholders.
As a consequence of the divestment of the Masterbatches business, as well as the anticipated divestment of the Pigments business by the end of 2020, Clariant’s Board of Directors is proposing an extraordinary cash distribution of CHF 3.00 per share to the Clariant Annual General Meeting to be held on March 30, 2020. Subject to a positive vote of Clariant’s shareholders, the extraordinary distribution of approx. CHF 1 billion will be paid out post the closing of the divestment of the Masterbatches business.
The deal with PolyOne comprises two separate transactions. The global Masterbatches business is sold in a deal valued at USD 1,500 million, representing c. 12.1 times the last twelve months reported EBITDA (ending September 2019). Separately, the sale of Clariant’s Masterbatches business in India has been approved by Clariant Chemicals (India) Limited’s Board of Directors and is valued at INR 4,260 million or approx. USD 60 million, representing c. 17.3 times the last twelve months reported EBITDA (ending September 2019). Clariant Chemicals (India) Limited is listed on the stock exchanges in India with Clariant AG holding a 51% controlling stake. The closing of both transactions is subject to customary closing conditions and regulatory approvals.
Clariant’s Masterbatches business offers colour and additive concentrates and performance solutions for plastics. Clariant’s Masterbatches help to enhance the market appeal or end-use performance of plastic products, packaging or fibres. In the financial year 2018, the total Masterbatches business generated sales of around CHF 1.181 billion.
PolyOne Raises Outlook for Fourth Quarter 2019 Adjusted Earnings
PolyOne Corporation (NYSE: POL), a leading global provider of specialized polymer materials, services and solutions, today provided an update to its fourth quarter 2019 performance outlook.
For the fourth quarter 2019, the company expects adjusted earnings per share of USD 0.30, a 25 % increase over the prior year. On its third quarter 2019 earnings conference call, the company said it expected fourth quarter adjusted earnings to be up about 10 %. This results in a full-year adjusted EPS outlook of USD 1.65 from continuing operations, a 9 % increase over the prior year.
“We continue to deliver margin expansion in all three segments from pricing actions, improved mix and cost reductions,” said Robert M. Patterson, Chairman, President and Chief Executive Officer, PolyOne Corporation. “The Specialty Engineered Materials segment in particular has exceeded our previous expectations, driven by strong performance in our composites platform and new business wins in healthcare.”
“We have invested heavily in composites, barrier technologies and other sustainable solutions, thus improving our end market diversification. These investments have built resiliency in our portfolio and are helping to overcome the soft demand conditions in certain regions and end markets,” Mr. Patterson added.
PolyOne Corporation (NYSE: POL), with 2018 revenues of $2.9 billion, is a premier provider of specialized polymer materials, services and solutions. The company adds value to global customers and improves sustainability through formulating materials, such as:
- Barrier technologies that preserve the shelf-life and quality of food, beverages, medicine and other perishable goods through high-performance materials that require less plastic
- Light-weighting solutions that replace heavier traditional materials like metal, glass and wood, which can improve fuel efficiency in all modes of transportation
- Breakthrough technologies that minimize wastewater and improve the recyclability of materials and packaging across a spectrum of end uses
PolyOne employs approximately 5700 associates and is certified ACC Responsible Care® and a founding member of the Alliance to End Plastic Waste.