CLEVELAND, Aug. 19, 2019 /PRNewswire/ -- PolyOne
Corporation (NYSE: POL), a leading global provider of specialized
polymer materials, services and solutions, today announced it has
entered into a definitive agreement to sell its Performance
Products and Solutions (PP&S) business to SK Capital Partners
for $775 million in cash.
PolyOne expects to record a pre-tax gain of approximately
$600 million at the time the sale is
completed.
With sales of approximately $700
million, PP&S is a global provider of formulated PVC and
polypropylene based solutions, as well as contract manufacturing
services, primarily serving the North American Construction and
Automotive end markets.
"We conducted what became a very competitive bidding process for
our PP&S segment," said Robert M.
Patterson, Chairman, President and CEO, PolyOne
Corporation. "Ultimately, we determined that divesting the
business to SK Capital Partners would provide greater flexibility
to accelerate our specialty growth strategy and is in the best
interest of customers, employees and shareholders."
"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," said Mr.
Patterson. "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."
The company noted it expects full year 2019 adjusted earnings
per share from continuing operations to expand 6-8% over the prior
year.
"We continue to benefit from recent investments made in
composites and other sustainable solutions which is helping us to
deliver adjusted EPS growth in an otherwise challenging
environment," said Mr. Patterson. "As discussed on our second
quarter conference call, margins are expanding as a result of
improved mix, pricing and cost reductions."
In accordance with US GAAP, the company expects the PP&S
business will be classified as "held for sale" and reported as a
discontinued operation. Attachment A provides an estimate of
adjusted earnings per share split between continuing and
discontinued operations for recent historic periods. These
estimates are subject to change as the company finalizes the
accounting related to the discontinued operations, including the
tax implications of the anticipated sale.
The company noted that HSBC served as financial advisor and led
the sale process for PolyOne. Jones
Day served as outside legal counsel. The sale is
subject to satisfaction of regulatory requirements and other
customary closing conditions, which the company expects to be
completed during the fourth quarter. The company will discuss
additional details of the transaction on its third quarter 2019
conference call.
About PolyOne
PolyOne Corporation (NYSE: POL), with 2018 revenues of
$3.5 billion, is a premier provider
of specialized polymer materials, services and solutions. The
company adds value to global customers and improves sustainability
through formulating materials, such as:
- Barrier technologies that preserve the shelf-life and quality
of food, beverages, medicine and other perishable goods through
high-performance materials that require less plastic
- Light-weighting solutions that replace heavier traditional
materials like metal, glass and wood, which can improve fuel
efficiency in all modes of transportation
- Breakthrough technologies that minimize wastewater and improve
the recyclability of materials and packaging across a spectrum of
end uses
PolyOne employs approximately 6,900 associates, is certified ACC
Responsible Care® and Great Place to Work®, and is a founding
member of the Alliance to End Plastic Waste. For more
information, visit www.polyone.com.
To access PolyOne's news library online, please visit
www.polyone.com/news.
Forward-looking Statements
In this press release, statements that are not reported
financial results or other historical information are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements give current expectations or forecasts of future events
and are not guarantees of future performance. They are based on
management's expectations that involve a number of business risks
and uncertainties, any of which could cause actual results to
differ materially from those expressed in or implied by the
forward-looking statements. They use words such as "will,"
"anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," and other words and terms of similar meaning in
connection with any discussion of future operating or financial
condition, performance and/or sales. Factors that could cause
actual results to differ materially from those implied by these
forward-looking statements include, but are not limited to: the
time required to consummate the proposed divestiture; the
satisfaction or waiver of conditions in the sale agreement; any
material adverse changes in the business supporting the PP&S
assets being sold; the ability to obtain required regulatory or
other third-party approvals and consents and otherwise consummate
the proposed divestiture; our ability to identify and evaluate
acquisition targets and consummate and integrate acquisitions;
disruptions, uncertainty or volatility in the credit markets that
could adversely impact the availability of credit already arranged
and the availability and cost of credit in the future; the effect
on foreign operations of currency fluctuations, tariffs and other
political, economic and regulatory risks; changes in polymer
consumption growth rates and laws and regulations regarding
plastics in jurisdictions where we conduct business; changes in
global industry capacity or in the rate at which anticipated
changes in industry capacity come online; fluctuations in raw
material prices, quality and supply, and in energy prices and
supply; production outages or material costs associated with
scheduled or unscheduled maintenance programs; unanticipated
developments that could occur with respect to contingencies such as
litigation and environmental matters; an inability to raise or
sustain prices for products or services; an ability to achieve or
delays in achieving or achievement of less than the anticipated
financial benefit from initiatives related to acquisitions and
integration, working capital reductions, cost reductions and
employee productivity goals; information systems failures and
cyberattacks; and other factors affecting our business beyond our
control, including, without limitation, changes in the general
economy, changes in interest rates and changes in the rate of
inflation. The above list of factors is not exhaustive.
We undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise. You are advised to consult any further disclosures we
make on related subjects in our reports on Form 10-Q, 8-K and 10-K
that we provide to the Securities and Exchange Commission.
Attachment
A
|
|
PolyOne
Corporation
|
Select Financial
Information for Estimated Impacts of Discontinued
Operations
|
(Unaudited)
|
|
|
Three Months
Ended March 31
|
|
Three Months
Ended June 30
|
|
Three Months
Ended
September 30
|
|
Three Months
Ended
December 31
|
|
Year Ended
December 31
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2018
|
|
2018
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated adjusted EPS
from con't ops
|
$
|
0.42
|
|
$
|
0.42
|
|
$
|
0.48
|
|
$
|
0.46
|
|
$
|
0.41
|
|
$
|
0.25
|
|
$
|
1.54
|
Estimated adjusted EPS
from disc ops
|
0.22
|
|
0.26
|
|
0.26
|
|
0.25
|
|
0.21
|
|
0.16
|
|
0.89
|
|
$
|
0.64
|
|
$
|
0.68
|
|
$
|
0.74
|
|
$
|
0.71
|
|
$
|
0.62
|
|
$
|
0.41
|
|
$
|
2.43
|
Special items, before
income taxes
|
(0.17)
|
|
(0.11)
|
|
(0.25)
|
|
(0.18)
|
|
(0.11)
|
|
(0.33)
|
|
(0.75)
|
Income tax benefit on
special items
|
0.04
|
|
0.03
|
|
0.06
|
|
0.05
|
|
0.04
|
|
0.07
|
|
0.19
|
Tax
adjustments
|
(0.02)
|
|
(0.01)
|
|
(0.01)
|
|
0.06
|
|
0.07
|
|
-
|
|
0.13
|
GAAP EPS
|
$
|
0.49
|
|
$
|
0.59
|
|
$
|
0.54
|
|
$
|
0.64
|
|
$
|
0.62
|
|
$
|
0.15
|
|
$
|
2.00
|
Senior management uses comparisons of diluted adjusted earnings
per share (EPS) from continuing operations attributable to PolyOne
shareholders, excluding special items, to assess performance and
facilitate comparability of results. Senior management believes
this measure is useful to investors because it allows for
comparison to PolyOne's performance in prior periods without the
effect of items that, by their nature, tend to obscure PolyOne's
operating results due to the potential variability across periods
based on timing, frequency and magnitude. Special items and tax
adjustments are defined in our most recent earnings release dated
July 25, 2019.
Estimated adjusted EPS from continuing operations and estimated
adjusted EPS from discontinued operations are subject to change as
the company finalizes accounting for the Performance Products and
Solutions segment as held for sale and the related income tax
impacts from the anticipated sale.
With respect to our outlook for full-year 2019 adjusted EPS from
continuing operations, the company does not provide a
reconciliation of this forward-looking non-GAAP financial measure
to its most comparable GAAP financial measure because it is not
possible for the company to provide a meaningful or accurate
calculation or estimation of reconciling items and the information
is not available due to the inherent difficulty of forecasting the
timing and amounts of special items.
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SOURCE PolyOne Corporation