Hexion to Sell Businesses
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|Hexion to sell phenolic specialty, two other businesses|
|MOSCOW (MRC) — Hexion (Columbus, Ohio) has agreed to sell its phenolic specialty resin, hexamine, and European-based forest products resins businesses for approximately USD425 million to private equity firms Black Diamond Capital Management (Greenwich, Connecticut) and Investindustrial (Luxembourg), said Chemweek.|
The deal consists of USD335 million in cash and certain assumed liabilities, with the remainder in future proceeds to be based on the performance of the business, says Hexion. The transaction is expected to close in the first quarter of 2021, subject to regulatory approvals and other customary closing conditions, including works council consultation. The company expects to use the sale proceeds to invest in its business and further reduce its debt, it says.
The combined businesses being sold posted sales of approximately USD530 million for the last 12 months ended 30 June 2020, according to Hexion. The sale includes approximately 900 personnel and 11 manufacturing facilities worldwide, where phenolic specialty resins and engineered thermoset molding compounds are produced for end markets including building and construction, industrial, automotive, electronics, agriculture, and consumer, it says.
“We continue to strategically manage our portfolio providing us the ability to further strengthen our balance sheet and maintain a strong business going forward. As we proceed, we will leverage our differentiated technology and global manufacturing footprint to serve the diversified customers of our remaining businesses,” says Hexion president and CEO, Craig Rogerson.
The businesses being acquired “boast globally recognizable brands and trademarks,” say Black Diamond and Investindustrial in a joint statement. The equity firms have partnered in the past on a collective investment in Polynt (Scanzorosciate, Italy) and Reichold (Durham, North Carolina), which saw the two companies merged into Polynt-Reichold in 2017. “Black Diamond has prior experience investing in phenolic specialty resin businesses and looks forward to bringing that experience to the acquired businesses,” they say.
Credit Suisse is acting as Hexion’s financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison as legal counsel. Hexion reported a first-quarter 2020 net loss in May of USD59 million, compared with a USD52-million loss in the year-ago quarter, with net sales declining 6.8% year on year to USD826 million.
As MRC informed earlier, Hexion, a major American manufacturer of phenol and bisphenol A (BPA), plans to close its BPA plant in Pernis (Pernis, The Netherlands) in early October for scheduled maintenance. This 120 ktpa BPA production facility will be closed in the second week of October and is expected to resume production in three weeks.
Phenol is the main raw material for bisphenol A (BPA) production, which in turn is used to produce polycarbonate (PC).
According to MRC’s ScanPlast, in Russia, following the results of the first two quarters, the total estimated consumption of PC granulate in the Russian Federation (excluding imports and exports to Belarus) amounted to 47.3 thousand tonnes against 40.7 thousand tonnes in 2019. Total demand increased by 16%.
Hexion Inc., formerly Momentive Specialty Chemicals Inc., is a chemical company based in Columbus, Ohio. It manufactures thermosetting resins and related technologies and specialty products. Hexion has two divisions: the epoxy, phenolic and coating resins division and the forest products division.