Swiss group Clariant (Muttenz; www.clariant.com) is proceeding with the sale of its masterbatch unit to US compounder and distributor PolyOne (Avon Lake, Ohio; www.polyone.com) as planned – see Plasteurope.com of 08.10.2019. The transaction is set to be completed in the third quarter of 2020 following regulatory approval. In a gross assessment of the business, Clariant values its masterbatch division at USD 1.56 bn (EUR 1.4 bn), which represents around 12.2 times its EBITDA of the financial year ending September 2019 (cash/debt free). PolyOne estimates the purchase price for the unit, which generated sales of CHF 1.15 bn (EUR 1.08 bn) in 2018, at USD 1.45 bn, or 11.1 times the EBITDA.

“After the successful divestment of Healthcare Packaging in October 2019 the agreement to sell Masterbatches is an important step in delivering on our strategy defined in 2015 to concentrate on our three core Business Areas Care Chemicals, Catalysis and Natural Resources,” said Hariolf Kottmann, who resumed responsibilities as executive chairman of Clariant after Ernesto Occhiello’s surprising announcement in summer 2019 that he would be leaving the company – see Plasteurope.com of 26.07.2019. “As announced, we are confident that we will execute the remaining divestment of our Pigments business in 2020 in order to build the new, more focused and stronger Clariant by 2021.” The Swiss group plans to use the proceeds from the sale for investments in its core business areas, to strengthen its balance sheets and return around CHF 1 bn in capital to shareholders.

Clariant’s masterbatch activities comprise 46 production sites and technology centres with a total workforce of around 3,600, to be integrated into PolyOne’s Color, Additives and Inks segment after the acquisition is completed in two transactions. The global masterbatch business will be sold in a deal valued at USD 1.5 bn, around 12.1 times the EBITDA, while Clariant’s masterbatch activities in India will be divested for around USD 60m, which represents 17.3 times the Indian unit’s EBITDA for the twelve months to the end of September 2019. Clariant holds 51% of Clariant Chemicals (India), which is listed on the stock exchanges in India.

PolyOne, meanwhile, has favourably updated its outlook for the fourth quarter of 2019, with earnings per share projected to rise 25% instead of the originally expected 10%. For full-year 2019, the US company sees earnings per share increasing 9% over the previous year. “We continue to deliver margin expansion in all three segments from pricing actions, improved mix and cost reductions,” said PolyOne CEO Robert Patterson. “The Specialty Engineered Materials segment in particular has exceeded our previous expectations.”