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April 21 2022, David R Brown

Avient plans to explore sale of distribution business following acquisition of DSM Protective Materials

Avient Corporation (NYSE: AVNT), a leading provider of specialized and sustainable material solutions, has announced that it plans to explore the sale of its Avient Distribution business following its purchase of DSM's Protective Materials business (including the Dyneema® brand) for USD 1.485 billion. The acquisition has been approved by the Boards of Directors at both Avient and DSM and is expected to close later this year, subject to the satisfaction of customary closing conditions.

In conjunction with our intent to acquire Dyneema, we plan to explore a potential sale of our distribution business

Robert M. Patterson
Chairman, President and CEO of Avient Corporation

“We are thrilled to add the Dyneema® brand and its unique technologies to Avient, further expanding our growing composites portfolio,” said Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation. He added, “In conjunction with our intent to acquire Dyneema, we plan to explore a potential sale of our distribution business. This would allow Avient to remain modestly levered at 2.9x adjusted EBITDA while also expanding adjusted EBITDA margins from 12% to 18%, the highest amongst our formulator peers.”

Avient's Distribution business supplies engineering and commodity grade resins, including Avient-produced compounds and masterbatches, to the North American, Central American and Asian markets. In 2021 the business reported sales of USD 1,587.3 million and operating income growth of 33%, despite material and pricing pressures throughout the global supply chain. An EBITDA of around USD 70 million values the distribution business at around USD 600-700 million at a 9x EBITDA multiple, which maybe the minimum Avient might consider for a well-established, market leading business in the polymer distribution field. Key competitors, and potential buyers, include Ravago, GPD Group (Nexeo Plastics) and M. Holland. The business is also likely to attract interest from PE investors.

About Avient Distribution
The Distribution business distributes more than 4,000 grades of engineering and commodity grade resins, including Avient-produced solutions, principally to the North American, Central American and Asian markets. These products are sold to over 6,500 custom injection molders and extruders who, in turn, convert them into plastic parts that are sold to end-users in a wide range of industries. Representing over 25 major suppliers, Avient Distribution offers customers a broad product portfolio, just-in-time delivery from multiple stocking locations and local technical support. Expansion in Central America and Asia have bolstered Distribution's ability to serve the specialized needs of customers globally.

Source(s): Avient Press Release

Further Information

Visit: https://www.avient.com