August 12 2022, David R Brown
Avient signs agreement to divest distribution business to H.I.G. Capital for USD 950 Million
Avient Corporation (NYSE: AVNT), a leading global provider of sustainable and specialized material solutions, has entered into a definitive agreement to sell its Distribution business to an affiliate of H.I.G. Capital for USD 950 million in cash, subject to regulatory approval.
We selected H.I.G. Capital based on the strength of their proposal, which values the business at approximately 10x LTM EBITDA and includes no financing contingencies
Robert M. Patterson
Chairman, President and CEO of Avient Corporation
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.
On April 20, 2022, the company had announced that it was exploring the sale of its Distribution business, in connection with announcing an agreement to acquire the Protective Materials business of DSM. The company recently completed that deal so this announcement was not unexpected.
“There were multiple buyers interested in acquiring the Distribution business, and it was a competitive process,” said Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation. “Ultimately, we selected H.I.G. Capital based on the strength of their proposal, which values the business at approximately 10x LTM EBITDA and includes no financing contingencies. We are also confident that H.I.G. will make an excellent home for the Distribution business and a good partner for Avient as both a supplier and a customer.”
The company noted that after-tax proceeds of approximately USD 750 million from the sale will be used to pay down near-term maturing debt. Pro forma for the sale of the Distribution business and the forthcoming acquisition of DSM's Protective Materials business, net debt to adjusted EBITDA leverage will be approximately 2.8x at the end of the year.
In accordance with US GAAP, the company expects the Distribution business will be classified as "held for sale" and reported as a discontinued operation in future filings. The sale is subject to satisfaction of regulatory requirements and other customary closing conditions.
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