Mergers & Acquisitions
September 29, 2021
Hexion to Split Into Two Companies
Hexion Holdings Corporation Announces Plan to Separate Into Two Independent Companies
Hexion Holdings Corporation Plans to be Listed Publicly on the NYSE; Plans to Execute a Spinoff of its Coatings & Composites Businesses to Current Shareholders
Creates Two Focused Companies Poised to Drive Long-Term Shareholder Value September 29, 2021 09:25 AM Eastern Daylight Time
COLUMBUS, Ohio–(BUSINESS WIRE)–Hexion Holdings Corporation (“Hexion Holdings” or the “Company”) today announced its plan to separate into two independent companies. The two companies will be “Hexion Holdings,” composed of the Company’s Adhesives and Versatic Acids™ and Derivatives product lines, and “Hexion Coatings and Composites (US) Inc.” (“HCC”), composed of Hexion Holdings’ former epoxy-based Coatings and Composites products. HCC will be renamed at a later date.
“Today marks the beginning of an exciting new chapter in Hexion’s 122-year history, and continues our strategy of narrowing our focus, improving the Company’s financial flexibility and driving long-term value creation for our shareholders”Tweet this
Hexion Holdings anticipates that the HCC separation transaction will be in the form of a distribution of 100% of the stock of HCC, a new and independent company to current holders of Hexion Holdings common stock and warrants. Upon completion of the HCC spin, current Hexion Holdings shareholders will own shares of both Hexion Holdings and HCC. As previously disclosed, Hexion Holdings will file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission for a proposed initial public offering on the New York Stock Exchange.
“Today marks the beginning of an exciting new chapter in Hexion’s 122-year history, and continues our strategy of narrowing our focus, improving the Company’s financial flexibility and driving long-term value creation for our shareholders,” said Craig Rogerson, Hexion Chairman, President and Chief Executive Officer. “With our recent strong performance, and after a comprehensive evaluation of strategic actions aimed at unlocking the value of our businesses, our Board and management team have determined that now is the right time to pursue a separation through an IPO and spinoff. The transaction will provide each company with significant liquidity, a sharper strategic focus and appropriately capitalized balance sheets while we continue to serve our customers’ needs. It is a testament to our people and our focus on operational execution that we have reached this successful milestone where our businesses are ideally positioned to be two strong standalone companies.”
The Company believes that this separation will result in material benefits to the standalone companies, including:
- Distinct strategic and management focus on specific operational, R&D and growth priorities, including the analysis of macroeconomic trends and the implementation of financial targets that best fit each business;
- A capital structure, dividend policy and capital deployment strategy tailored to specific business models and growth strategies. Both businesses are expected to have direct access to the debt and equity capital markets to fund their respective growth strategies; and
- An investor base that is aligned with the streamlined value proposition for each company.
Hexion Holdings Building on Strong Momentum and Aligned with Growing Demand for Environmentally Preferred Building and Coatings Materials
Following the separation, Hexion Holdings will consist of the Company’s existing Adhesives and Versatic Acids™ and Derivatives product lines. Hexion Holdings will continue to build on its strong momentum, driven primarily by strong new residential construction and remodeling demand in North America, continued capacity expansion progress and gains from innovative new products, as well as the need for more sustainable building and coatings materials. As a standalone company, Hexion Holdings is expected to have favorable cash flow attributes and a stronger financial profile.
Hexion Holdings generated historical net sales of $2.5 billion and pro forma net sales of approximately $1.4 billion for the year-ended December 31, 2020. Hexion is expected to maintain appropriate debt levels going forward.
HCC Well Positioned to Expand Leadership and Global Presence
HCC will consist of Hexion Holdings’ former base and specialty epoxy resins product lines. HCC will remain a leading global supplier of epoxy resins and systems. As a standalone company, HCC will have greater ability to grow and expand its leadership position in attractive global markets. Importantly, HCC is also focused on addressing customers’ demands for more environmentally preferred solutions, and providing innovative solutions for the wind energy and automotive industries.
With its senior management team based in Rotterdam, the Netherlands, HCC expects to maintain a significant global presence. Stafford, Texas, will serve as its primary U.S. office and HCC will also maintain an executive office in Shanghai, China. In addition, HCC will continue to operate world-scale epoxy plants in Pernis and Deer Park, Texas, as well as additional manufacturing operations in the United States, Germany, Spain and South Korea.
HCC generated total sales of approximately $1.1 billion for the year-ended December 31, 2020. HCC is expected to maintain appropriate debt levels going forward.
Experienced and Proven Leadership
Craig Rogerson will continue to lead Hexion Holdings as Chairman, President and Chief Executive Officer. George Knight will continue in his role at Hexion Holdings as Executive Vice President and Chief Financial Officer. Ann Frederix, currently Senior Vice President, Coatings & Composites, Hexion Holdings, is expected to serve as Chief Executive Officer of HCC. Joost Vierhout, currently Senior Finance Director, Global Epoxy and Versatics, Hexion Holdings, is expected to serve as Chief Financial Officer of HCC.
Additional Details
Hexion Holdings and HCC are expected to enter into a Shared Services Agreement, which will provide for Hexion Holdings to provide to HCC, on a transitional basis, certain services or functions that the companies historically have shared, and one or more commercial agreements relating to the ownership, management, maintenance, support and use of certain shared operations services by Hexion Holdings to HCC.
The HCC separation transaction is currently targeted to be completed in the fourth quarter 2021, subject to final approval by the Board of Directors, customary regulatory approvals and tax and legal considerations.
Advisors
Moelis & Company LLC and Morgan Stanley & Co. LLC are serving as strategic advisors in connection with the strategic review, and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Davis Polk & Wardwell LLP are serving as offering and M&A counsel to Hexion.
This press release is not an offer to sell securities.
About Hexion Holdings Corporation
Based in Columbus, Ohio, Hexion Holdings Corporation (“Hexion Holdings”), is the indirect parent of Hexion Inc. (“Hexion”). Hexion is a global leader in thermoset resins. Hexion serves the global adhesive and industrial markets through a broad range of thermoset technologies, specialty products and technical support for customers in a diverse range of applications and industries. Additional information about Hexion, its products and sustainability is available at www.hexion.com.
September 28, 2021
Huntsman and KPX for JV
KPX Chemical and Huntsman form Joint Venture in Korea
Download as PDF September 28, 2021 2:00am EDT
Strategic alliance will provide Korean automakers with advanced polyurethane systems solutions
THE WOODLANDS, Texas, Sept. 28, 2021 /PRNewswire/ — KPX Chemical, a leading polyols producer for polyurethanes in Korea, and Huntsman Corporation (NYSE: HUN), a world-leading MDI-based polyurethanes and specialty chemical manufacturer, today announced the establishment of a joint venture named KPX HUNTSMAN POLYURETHANES AUTOMOTIVE CO., LTD. (KHPUA). The joint venture will create and provide innovative polyurethane system solutions to Korean automakers from a specialty polyurethanes manufacturing facility at KPX Chemical’s Ulsan plant. Operations are expected to commence by the end of October.
The Korean automotive industry is undergoing profound changes and presents new opportunities for high performance and light weight polyurethane system solutions. The new joint venture will accelerate growth in this sector by providing sustainable innovations and a high level of technical service support to its customers. KPX Chemical will leverage its 47-years’ experience in polyol technology and know-how by combining it with Huntsman’s proven ability to develop high performance, differentiated, MDI-based automotive solutions for vehicle manufacturers and its fully integrated global supply chain.
Tony Hankins, President of Huntsman’s Polyurethanes division and CEO of Huntsman Asia Pacific, said: “We are delighted to join forces with KPX Chemical. Korea is one of Huntsman’s key markets in Asia and driving continued business growth in the automotive industry is a priority for us. The new joint venture will create and provide customized polyurethane systems solutions to meet local automotive customers’ needs for improved comfort, superior acoustics and light-weighting. By creating value for its customers, KHPUA will enable downstream polyurethanes businesses to develop in a more sustainable way, both economically and environmentally.”
Kim Moon-young, President of KPX Chemical, said: “This cooperation is of great strategic significance to both parties. Together, under the banner of KHPUA, we will leverage the R&D and capacity advantages of KPX Chemical and Huntsman in the region to become the industry’s preferred innovation partner. It is an exciting time to be creating a new venture and we look forward to working with key players in the region to meet growing demand for autonomous vehicles and electric transport solutions that can support the country’s carbon neutrality ambitions.”
September 28, 2021
Huntsman and KPX for JV
KPX Chemical and Huntsman form Joint Venture in Korea
Download as PDF September 28, 2021 2:00am EDT
Strategic alliance will provide Korean automakers with advanced polyurethane systems solutions
THE WOODLANDS, Texas, Sept. 28, 2021 /PRNewswire/ — KPX Chemical, a leading polyols producer for polyurethanes in Korea, and Huntsman Corporation (NYSE: HUN), a world-leading MDI-based polyurethanes and specialty chemical manufacturer, today announced the establishment of a joint venture named KPX HUNTSMAN POLYURETHANES AUTOMOTIVE CO., LTD. (KHPUA). The joint venture will create and provide innovative polyurethane system solutions to Korean automakers from a specialty polyurethanes manufacturing facility at KPX Chemical’s Ulsan plant. Operations are expected to commence by the end of October.
The Korean automotive industry is undergoing profound changes and presents new opportunities for high performance and light weight polyurethane system solutions. The new joint venture will accelerate growth in this sector by providing sustainable innovations and a high level of technical service support to its customers. KPX Chemical will leverage its 47-years’ experience in polyol technology and know-how by combining it with Huntsman’s proven ability to develop high performance, differentiated, MDI-based automotive solutions for vehicle manufacturers and its fully integrated global supply chain.
Tony Hankins, President of Huntsman’s Polyurethanes division and CEO of Huntsman Asia Pacific, said: “We are delighted to join forces with KPX Chemical. Korea is one of Huntsman’s key markets in Asia and driving continued business growth in the automotive industry is a priority for us. The new joint venture will create and provide customized polyurethane systems solutions to meet local automotive customers’ needs for improved comfort, superior acoustics and light-weighting. By creating value for its customers, KHPUA will enable downstream polyurethanes businesses to develop in a more sustainable way, both economically and environmentally.”
Kim Moon-young, President of KPX Chemical, said: “This cooperation is of great strategic significance to both parties. Together, under the banner of KHPUA, we will leverage the R&D and capacity advantages of KPX Chemical and Huntsman in the region to become the industry’s preferred innovation partner. It is an exciting time to be creating a new venture and we look forward to working with key players in the region to meet growing demand for autonomous vehicles and electric transport solutions that can support the country’s carbon neutrality ambitions.”
September 27, 2021
Vita Acquisition
Manchester foam products group acquires mattress manufacturer
Acquisitions September 27 2021
Manchester private equity firm NorthEdge and The Belfield Group have completed the sale of Usleep, a specialist mattress manufacturer, to The Vita Group, the Middleton-based manufacturer of premium foam products, for an undisclosed sum.
Usleep is a subsidiary of upholstery and home furnishings manufacturer Belfield, which secured private equity investment from NorthEdge in 2016.
It provides an end-to-end service for its customers, from product design and development through to fulfilment, from two well-invested manufacturing sites in Ashton-under-Lyne and Castle Donnington.
Usleep is a zero waste to landfill business that works closely with its suppliers and customers to encourage sustainability and best-in-class business ethics.
The divestment of the Usleep subsidiary, which provides the second strong return for NorthEdge Fund II in the last quarter, follows a successful partnership between NorthEdge and Belfield.
During the partnership there has been significant investment into Usleep’s manufacturing facilties, providing capacity for growth and the capability to deliver market leading operational efficiency through semi-automated manufacturing – resulting in the business doubling EBITDA during the investment period.
Usleep serves market leading direct-to-consumer and omni-channel retailers, and continued to trade strongly throughout the COVID-19 pandemic as a result of the structural channel shift to online and the segment growth of foam and hybrid mattresses.
Vita’s acquisition of Usleep will allow the business to continue to grow its manufacturing capabilities and expand further internationally. The business will continue to be led by Paul Glynn, mattress divisional managing director, and Usleep managing director, Tina Tombs.
Gary Lasham, CEO of Belfield, said: “The backing we’ve had from NorthEdge has been excellent. They have supported the business with over £6m investment over the last four years to facilitate continued growth, including £2m to expand Usleep’s manufacturing capabilities in 2018.
“They have also driven our continuous focus on operational excellence, people and health and safety. Together we’ve built a high performing business, and we’re thrilled to have secured a new partner for Usleep that will allow the business to continue to achieve its full potential.”
Tom Rowley, director and head of Yorkshire and North East at NorthEdge, who led the Belfield MBO in 2016 alongside NorthEdge managing partner Grant Berry, said: “Usleep has consistently been a strong business in The Belfield Group. It is led by a highly experienced senior leadership team and has long standing customer and supplier relationships.
“During our partnership we have invested heavily into Usleep’s facilities, focussing on delivering operational excellence. As a result Usleep are the partner of choice for high growth omni channel and online retailers, and have the capability to continue expanding in line with increasing demand.”
Nicola McQuaid, director at NorthEdge, said: “It was vital for us to find the right partner for the next phase of Usleep’s growth.
“Vita has been supplying Usleep for some time, so they already had a strong relationship with the business and the management team, and critically recognised Usleep’s growth potential in the UK and internationally. We are looking forward to watching the business continue to grow over the coming years under Paul and Tina’s leadership.”
Paul Glynn, managing director of Usleep, said: “We’d like to thank the teams at Belfield and NorthEdge for their support over the years, and we can’t wait to see what the future holds for Usleep in partnership with Vita.”
Speaking on behalf of The Vita Group, group CEO Ian Robb said: “We are very excited to have Usleep join the Vita family. Usleep aligns with our values of safety, responsibility, resourcefulness, integrity, and innovation.
“Together, we look forward to supporting our customers and suppliers. This acquisition will enable collaboration on innovation across the end-to-end service, from unique foam technologies through to innovative mattress design.”
This will be the third acquisition completed by Vita in 2021 following the acquisitions of IMPE Srl, located in Naples, Italy, in the first quarter and UK-based Technical Foam Services in quarter two.
The Usleep acquisition significantly enhances and accelerates Vita’s strategy to grow its bedding business across Europe.
Vita has existing mattress production facilities in France, Germany, Romania, The Netherlands, UK and Hungary. Vita has long term strategic relationships with a range of global partners in the bedding sector, building on a wide range of R&D capabilities via its innovation centres in the UK (bedding) and Lithuania (chemistry/formulation).
NorthEdge and The Belfield Group were advised by Deloitte (lead advisory), Addleshaw Goddard (legal), PwC (FDD) and KPMG (tax structuring).
Vita was advised by DLA (legal), PwC (FDD, ops DD, tax), RSK (environmental DD) and Lockton (W&I broker).
www.thebusinessdesk.com/northwest/news/2086057-manchester-foam-products-group-acquires-mattress-manufacturer
September 27, 2021
Vita Acquisition
Manchester foam products group acquires mattress manufacturer
Acquisitions September 27 2021
Manchester private equity firm NorthEdge and The Belfield Group have completed the sale of Usleep, a specialist mattress manufacturer, to The Vita Group, the Middleton-based manufacturer of premium foam products, for an undisclosed sum.
Usleep is a subsidiary of upholstery and home furnishings manufacturer Belfield, which secured private equity investment from NorthEdge in 2016.
It provides an end-to-end service for its customers, from product design and development through to fulfilment, from two well-invested manufacturing sites in Ashton-under-Lyne and Castle Donnington.
Usleep is a zero waste to landfill business that works closely with its suppliers and customers to encourage sustainability and best-in-class business ethics.
The divestment of the Usleep subsidiary, which provides the second strong return for NorthEdge Fund II in the last quarter, follows a successful partnership between NorthEdge and Belfield.
During the partnership there has been significant investment into Usleep’s manufacturing facilties, providing capacity for growth and the capability to deliver market leading operational efficiency through semi-automated manufacturing – resulting in the business doubling EBITDA during the investment period.
Usleep serves market leading direct-to-consumer and omni-channel retailers, and continued to trade strongly throughout the COVID-19 pandemic as a result of the structural channel shift to online and the segment growth of foam and hybrid mattresses.
Vita’s acquisition of Usleep will allow the business to continue to grow its manufacturing capabilities and expand further internationally. The business will continue to be led by Paul Glynn, mattress divisional managing director, and Usleep managing director, Tina Tombs.
Gary Lasham, CEO of Belfield, said: “The backing we’ve had from NorthEdge has been excellent. They have supported the business with over £6m investment over the last four years to facilitate continued growth, including £2m to expand Usleep’s manufacturing capabilities in 2018.
“They have also driven our continuous focus on operational excellence, people and health and safety. Together we’ve built a high performing business, and we’re thrilled to have secured a new partner for Usleep that will allow the business to continue to achieve its full potential.”
Tom Rowley, director and head of Yorkshire and North East at NorthEdge, who led the Belfield MBO in 2016 alongside NorthEdge managing partner Grant Berry, said: “Usleep has consistently been a strong business in The Belfield Group. It is led by a highly experienced senior leadership team and has long standing customer and supplier relationships.
“During our partnership we have invested heavily into Usleep’s facilities, focussing on delivering operational excellence. As a result Usleep are the partner of choice for high growth omni channel and online retailers, and have the capability to continue expanding in line with increasing demand.”
Nicola McQuaid, director at NorthEdge, said: “It was vital for us to find the right partner for the next phase of Usleep’s growth.
“Vita has been supplying Usleep for some time, so they already had a strong relationship with the business and the management team, and critically recognised Usleep’s growth potential in the UK and internationally. We are looking forward to watching the business continue to grow over the coming years under Paul and Tina’s leadership.”
Paul Glynn, managing director of Usleep, said: “We’d like to thank the teams at Belfield and NorthEdge for their support over the years, and we can’t wait to see what the future holds for Usleep in partnership with Vita.”
Speaking on behalf of The Vita Group, group CEO Ian Robb said: “We are very excited to have Usleep join the Vita family. Usleep aligns with our values of safety, responsibility, resourcefulness, integrity, and innovation.
“Together, we look forward to supporting our customers and suppliers. This acquisition will enable collaboration on innovation across the end-to-end service, from unique foam technologies through to innovative mattress design.”
This will be the third acquisition completed by Vita in 2021 following the acquisitions of IMPE Srl, located in Naples, Italy, in the first quarter and UK-based Technical Foam Services in quarter two.
The Usleep acquisition significantly enhances and accelerates Vita’s strategy to grow its bedding business across Europe.
Vita has existing mattress production facilities in France, Germany, Romania, The Netherlands, UK and Hungary. Vita has long term strategic relationships with a range of global partners in the bedding sector, building on a wide range of R&D capabilities via its innovation centres in the UK (bedding) and Lithuania (chemistry/formulation).
NorthEdge and The Belfield Group were advised by Deloitte (lead advisory), Addleshaw Goddard (legal), PwC (FDD) and KPMG (tax structuring).
Vita was advised by DLA (legal), PwC (FDD, ops DD, tax), RSK (environmental DD) and Lockton (W&I broker).
www.thebusinessdesk.com/northwest/news/2086057-manchester-foam-products-group-acquires-mattress-manufacturer
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