PolyOne Signs Agreement to Divest Designed Structures and Solutions
CLEVELAND, June 29, 2017 /PRNewswire/ -- PolyOne Corporation (NYSE: POL), a premier global provider of specialized polymer materials, services and solutions, today announced it has entered into a definitive agreement whereby the company will sell its Designed Structures and Solutions (DSS) business, which includes sheet, rollstock and packaging assets, to Arsenal Capital Partners for $115 million.
"The decision to divest DSS comes after evaluating several strategic options for the business and concluding this is the best course of action for our customers, associates and shareholders," said
Robert M. Patterson, chairman, president and chief executive officer, PolyOne Corporation. "I'm pleased that we have come to agreement with Arsenal who is very well positioned to complete the transformation work we have begun and serve DSS customers going forward."
Mr. Patterson continued, "Looking back at the Spartech acquisition completed in 2013, there were a number of positive, value-creating elements of the deal. These include the color concentrate and formulation assets that have seamlessly integrated into the other segments of PolyOne, as well as the beginnings of our IQ Design services which are now broadly used across the entire company."
"We intend to leverage these assets going forward, as well as seek out new investments that expand our material science, polymer formulation and world-class service capabilities. This is what we do best, and I expect PolyOne's now streamlined structure will further improve our focus and accelerate our growth as we pursue our 2020 Platinum Vision," Mr. Patterson added.
The sale of DSS is subject to satisfaction of regulatory requirements and other customary closing conditions, which the company expects to be completed in the third quarter of 2017. Proceeds from the sale will be used to pay down short term borrowings and fund ongoing growth initiatives.
In accordance with US GAAP, the DSS business will be classified as "held for sale" and be reported as discontinued operations. Accordingly, the company will be required to record the assets related to the DSS business at fair value, less an amount of estimated sale costs. The company anticipates this will result in an after-tax charge of $220 million in the second quarter.
To facilitate investor review, PolyOne has recast historical periods to reflect the presentation of DSS as discontinued operations and included those recast financials on the company's website at www.polyone.com/investors/events-presentations. The company will discuss additional details of the transaction on its second quarter 2017 conference call.
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: our ability to realize anticipated savings and operational benefits from the realignment of assets, including the closure of manufacturing facilities; the timing of closings and shifts of production to new facilities related to asset realignments and any unforeseen loss of customers and/or disruptions of service or quality caused by such closings and/or production shifts; separation and severance amounts that differ from original estimates; amounts for non-cash charges related to asset write-offs and accelerated depreciation realignments of property, plant and equipment that differ from original estimates; our ability to identify and evaluate acquisition targets and consummate acquisitions; the ability to successfully integrate acquired businesses into our operations, such as Rutland, Comptek, SilCoTec, Gordon Composites and Polystrand, including whether such businesses will be accretive, retain the management teams of acquired businesses, and retain relationships with customers of acquired businesses; 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 financial condition of our customers, including the ability of customers (especially those that may be highly leveraged and those with inadequate liquidity) to maintain their credit availability; the speed and extent of an economic recovery, including the recovery of the housing market; our ability to achieve new business gains; 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 the disposal of plastic 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 achieve or delays in achieving or achievement of less than the anticipated financial benefit from initiatives related to working capital reductions, cost reductions and employee productivity goals; an inability to raise or sustain prices for products or services; an inability to maintain appropriate relations with unions and employees; our ability to continue to pay cash dividends; the amount and timing of repurchases of our common shares, if any; 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.
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SOURCE PolyOne Corporation
Investor Relations Contact: Eric R. Swanson, Director, Investor Relations, PolyOne Corporation, +1 440-930-1018, email@example.com, Media Contact: Kyle G. Rose, Vice President, Corporate Communications, PolyOne Corporation, +1 440-930-3162, firstname.lastname@example.org