PolyOne To Buy Clariant's Color And Additive Masterbatch Business; Lifts Outlook

(RTTNews) - PolyOne Corp. (POL), a provider of specialized polymer materials, announced Thursday that it has agreed to buy color and additive masterbatch business of Swiss specialty chemicals company Clariant AG (CLZNY.PK, CRN.L, CLZNF.PK). PolyOne also has entered into an agreement with Clariant Chemicals India Ltd. to purchase its color and additive masterbatch business. The combined net purchase price is $1.45 billion.

The acquisition has been approved by the Boards of Directors at the companies and is expected to close in the middle of next year.

Clariant's color and additive masterbatch business recorded sales of $1.15 billion for the last twelve months.

The Clariant business includes 46 manufacturing operations and technology centers in 29 countries and approximately 3,600 employees, who will join PolyOne's Color, Additives and Inks segment.

The transaction, pro forma for anticipated synergies of $60 million, is expected to add $0.85 to adjusted earnings per share, excluding the impact of step-up depreciation and amortization related to purchase accounting.

Separately, PolyOne said it has raised its outlook.

For the fourth quarter 2019, the company now expects adjusted earnings per share of $0.30, a 25% increase over the prior year. The company previously was projecting fourth-quarter adjusted earnings to be up about 10%. The full-year adjusted earnings per share will now be $1.65 from continuing operations, a 9% increase over the prior year.

With the latest acquisition and the recent divestiture of Performance Products & Solutions segment, PolyOne now expects over 85% of pro forma adjusted EBITDA to be generated from specialty applications.

Robert Patterson, Chairman, President and Chief Executive Officer, PolyOne, said, "We continue to deliver margin expansion in all three segments from pricing actions, improved mix and cost reductions. The Specialty Engineered Materials segment in particular has exceeded our previous expectations, driven by strong performance in our composites platform and new business wins in healthcare."