PolyOne to Buy Clariant Additives Unit for About $1.5 Billion
PolyOne to Buy Clariant Additives Unit for About $1.5 Billion
(Bloomberg) -- PolyOne Corp. agreed to buy an additives unit from Switzerland’s Clariant AG for about $1.5 billion to expand in the market for plastic pigments needed to color car parts and packaging.
The U.S. company expects to generate $60 million in cost savings as it absorbs Clariant’s business, the Cleveland-based company said in a statement on Thursday. That should add $0.85 to adjusted earnings per share, it said.
“This will be a truly transformational acquisition,” PolyOne Chief Executive Officer Robert Patterson said. Over 85% of earnings will now stem from so called specialty chemicals, which command higher margins and are less prone to economic cycles, the company said.
The agreement paves the way for Clariant Chairman Hariolf Kottmann to get the deal over the line at a time when a slowdown in markets such as the automotive industry complicated negotiations. PolyOne is paying the equivalent of 11.1 times earnings for the past 12 months, falling to a multiple of 7.6 times when accounting for expected cost savings, it said.
To contact the reporter on this story: Andrew Noël in London at anoel@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Young-Sam Cho
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