US-based specialized polymer materials, services and solutions provider PolyOne has agreed to divest its Performance Products and Solutions (PP&S) business to SK Capital, a private investment firm, for a cash consideration of $775 million.

PP&S with sales of approximately $700 million is formulated PVC and polypropylene-based solutions as well as contract manufacturing services provider.

With approximately 1,100 employees, PP&S runs twelve production facilities that cater to the construction and automotive end markets across both North America and Asia.

The divestiture is expected to provide PolyOne with near-term deleveraging benefits and future portfolio expansion opportunities for specialty solutions.

PolyOne said it expects full-year 2019 adjusted earnings per share from continuing operations to increase 6-8% over the prior year and a pre-tax gain of approximately US$600 million when the sale is completed.

Robert M Patterson – chairman, president and CEO, PolyOne said:  “In the short term, proceeds from the sale will be used to pay down debt on our revolving line of credit and reduce our overall net debt to EBITDA leverage from 3.2 to 2.0 by year-end.

“Longer term, we can further refine our focus on investing in and growing our three remaining segments: Specialty Engineered Materials; Color, Additives, and Inks; and Distribution.”

Subject to satisfaction of regulatory requirements and other customary closing conditions, the transaction is expected to close in the fourth quarter of 2019.

Cerberus Business Finance provided committed debt financing to SK Capital while Latham & Watkins LLP acted as legal counsel.

HSBC served as financial advisor and led the sale process for PolyOne while Jones Day served as outside legal counsel.

  Performance Products and Solutions, PolyOne, Robert M Patterson, SK Capital, USA