PolyOne Corporation, a premier global provider of specialized polymer materials, services and solutions, has entered into a definitive agreement whereby the company will sell its Designed Structures and Solutions (DSS) business, which includes sheet, rollstock and packaging assets, to Arsenal Capital Partners for US$115 mln.
"The decision to divest DSS comes after evaluating several strategic options for the business and concluding this is the best course of action for our customers, associates and shareholders," said Robert M. Patterson, chairman, president and chief executive officer, PolyOne Corporation. "I'm pleased that we have come to agreement with Arsenal who is very well positioned to complete the transformation work we have begun and serve DSS customers going forward."
Mr. Patterson continued, "Looking back at the Spartech acquisition completed in 2013, there were a number of positive, value-creating elements of the deal. These include the color concentrate and formulation assets that have seamlessly integrated into the other segments of PolyOne, as well as the beginnings of our IQ Design services which are now broadly used across the entire company. We intend to leverage these assets going forward, as well as seek out new investments that expand our material science, polymer formulation and world-class service capabilities. This is what we do best, and I expect PolyOne's now streamlined structure will further improve our focus and accelerate our growth as we pursue our 2020 Platinum Vision," Mr. Patterson added.
The sale of DSS is subject to satisfaction of regulatory requirements and other customary closing conditions, which the company expects to be completed in Q3-2017. Proceeds from the sale will be used to pay down short term borrowings and fund ongoing growth initiatives. In accordance with US GAAP, the DSS business will be classified as "held for sale" and be reported as discontinued operations. Accordingly, the company will be required to record the assets related to the DSS business at fair value, less an amount of estimated sale costs. The company anticipates this will result in an after-tax charge of US$220 million in the second quarter.