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PolyOne Buys ColorMatrix Group
5 years, 8 months ago Posted in: Additives News 0

 PolyOne Accelerates Specialty Growth with Agreement to Acquire ColorMatrix Group

SOURCE: PolyOne

CLEVELAND – October 3, 2011 – PolyOne Corporation (NYSE: POL), a premier global provider of specialized polymer materials, services and solutions, today announced an agreement to acquire ColorMatrix Group, Inc., the leading global innovator in liquid colorants, additives and fluoropolymers.

“I am extremely pleased to announce we’ve reached an agreement to acquire ColorMatrix, an exceptional and unique specialty company,” said Stephen D. Newlin, chairman, president and chief executive officer, PolyOne Corporation. “Much like our acquisition of GLS in 2008, ColorMatrix is a game-changer for PolyOne. With the addition of ColorMatrix, more than 50 percent of PolyOne’s operating income will now be derived from our specialty businesses, compared to only 2 percent in 2005.”

ColorMatrix is the leading manufacturer of performance-enhancing specialty additives, liquid colorant and dosing technologies that serve diverse niche markets, such as rigid beverage and food packaging, performance molding and fiber. The company’s leadership position in technology is evidenced by an IP portfolio of 162 patents and 107 pending applications worldwide. Its solutions in packaging, in particular, offer customers exceptional performance attributes such as increased product shelf life, taste preservation and improved recyclability.

Further, ColorMatrix is a leading global provider of colorant for fluoropolymers and provides specialty additives that support fluoropolymers’ unique high-performance properties such as lubricity, high-level heat insulation, static dissipation and x-ray opaqueness. Through its April 2011 acquisition of Gayson, ColorMatrix expanded its portfolio to include short turnaround, custom color dispersions used in silicone processing for a broad range of medical, consumer and automotive applications.

Under the leadership of CEO John Gelp and a strong management team, ColorMatrix achieved sales and EBITDA of approximately $196.8 million and $43.6 million respectively for the 12 months ended June 30, 2011.

“Since 2002, ColorMatrix has organically increased EBITDA at an annualized growth rate of 16 percent, and our purchase price of $486 million recognizes the earnings and growth potential of this specialty business,” said Newlin. “We believe we can accelerate this growth by leveraging our global scale and through additional investment in commercial resources, just as we’ve done with GLS.”

“Not only will the acquisition of ColorMatrix accelerate our specialization strategy, it also expands our geographic presence in Asia and Brazil and creates an entry point into Russia,” said Robert M. Patterson, executive vice president and chief financial officer. Approximately 70 percent of ColorMatrix’s revenues are outside North America.

PolyOne intends to finance the purchase price of $486 million, which includes transaction tax benefits of $10 million, with a combination of cash on hand and the addition of approximately $300 million of long term debt. The acquisition is being made on a cash free, debt free basis, and the purchase price is subject to a customary working capital adjustment and other closing conditions.

“Net of interest expense on the long term debt, and the incremental investments in commercial resources, we expect ColorMatrix to be modestly accretive to earnings in 2012 ($0.02-$0.03 per share) and to add approximately $0.10-$0.12 per share in 2013,” added Patterson.

This acquisition is subject to regulatory approvals and is expected to close late this year. PolyOne management will discuss the acquisition in more detail during its regularly scheduled third quarter earnings conference call to be held on October 26, 2011.

About PolyOne
PolyOne Corporation, with 2010 revenues of $2.6 billion, is a premier provider of specialized polymer materials, services and solutions. Headquartered outside of Cleveland, Ohio USA, PolyOne has operations around the world. For additional information on PolyOne, visit our Web site at www.polyone.com.

About ColorMatrix
ColorMatrix Group Inc., based in Berea, Ohio, is a leading specialty provider of innovative liquid colorants and additives business that serves diverse segments, including rigid beverage and food packaging, industrial extrusion, performance molding, wire, cable, fiber, and silicone rubber markets. ColorMatrix has operations, R&D capabilities and customer reach throughout the globe. For additional information on ColorMatrix, visit its Web site at www.colormatrix.com.

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