Kraton Performance Polymers announces sale of compounding business to PolyOne

04-Feb-16

Kraton Performance Polymers, Inc. has completed the sale of certain assets related to its compounding business to PolyOne Corporation for US$72 mln in cash. In conjunction with the sale, Kraton and PolyOne have entered into a long term supply agreement, through which Kraton has exclusive supply rights for polymers used in the divested business. Kraton's compound sales have primarily been directed into personal care, protective film, general compounds for consumer, medical & automotive applications, with the compound sales previously reported under the Specialty Polymers business line. Taking into consideration future polymer sales under the supply agreement, the net revenue impact resulting from the sale of the compounding business is less than two percent of Kraton's consolidated revenue for fiscal year 2014. As a leading provider of specialty polymers, Kraton will continue to serve growth in demand for specialized HSBC and USBC polymers to support the global compounding market through its versatile family of styrenic block copolymers that add substantial value to a wide variety of products. Following transition of the business to PolyOne, Kraton expects to realize fixed cost savings arising from the sale of the business. Kraton intends to use proceeds from the sale to reduce outstanding indebtedness. "Over the years Kraton and PolyOne have enjoyed a significant relationship that has been based upon a mutual appreciation for the value of innovation," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer. "This transaction will enable Kraton to focus on its core strengths around polymer design, and enable PolyOne to focus on its leading capabilities as a provider of polymer formulations. Ultimately, we expect the transaction to lead to additional growth opportunities for both companies," said Fogarty. Commenting on the transaction, Robert M. Patterson, PolyOne's President and Chief Executive Officer, said, "We are very pleased to have made this investment for our customers and their product design, development and performance goals. In addition, we are pleased to be expanding our relationship with Kraton. We will work together to ensure a swift and seamless transition, as we leverage our collective TPE know-how, global reach and commercial expertise."