In a move that will strengthen its position in global markets for rotational molding and masterbatch materials, Schulman Inc. has acquired ICO Inc. in a transaction valued at almost US$ 191.4 mln. The global compounder and distributor based in Fairlawn has signed a definitive deal to buy Houston-based ICO, a global polymer powder and plastic film concentrates producer. The deal still requires approval from ICO shareholders and is valued at US$105 mln in cash plus 5.1 million shares of Schulman common stock. After the deal closes, ICO shareholders will own about 16% of the combined company. Schulman intends to pay the cash portion of the purchase price out of its approximately US$230 mln cash on hand.
ICO has 20 locations in 9 countries. It’s US sites include a compounding plant in LaPorte, Texas; size reduction plants in Allentown, Pa., and Grand Junction, Tenn.; and plants that provide both of those services in East Chicago, Ind.; Fontana, Calif.; and China, Texas. The Bayshore Industrial subsidiary produces specialty compounds, concentrates and additives primarily for the plastic film industry. ICO’s largest unit is ICO Europe, which generated 45% of the firm’s 2009 sales.
The only goal left unmet by the ICO deal is growth as a niche player in engineering plastics, to meet which, the company is looking at acquisitions.