HOUSTON, Feb. 3, 2016 /PRNewswire/ -- Kraton Performance Polymers, Inc. ("Kraton") today announced that it has completed the sale of certain assets related to its compounding business to PolyOne Corporation (NYSE "POL") for $72 million in cash. In conjunction with the sale, Kraton and PolyOne have entered into a long term supply agreement, through which Kraton has exclusive supply rights for polymers used in the divested business.
Kraton's compound sales have primarily been directed into personal care, protective film, general compounds for consumer, medical & automotive applications, with the compound sales previously reported under the Specialty Polymers business line. Taking into consideration future polymer sales under the supply agreement, the net revenue impact resulting from the sale of the compounding business is less than two percent of Kraton's consolidated revenue for fiscal year 2014. As a leading provider of specialty polymers, Kraton will continue to serve growth in demand for specialized HSBC and USBC polymers to support the global compounding market through its versatile family of styrenic block copolymers that add substantial value to a wide variety of products.
Following transition of the business to PolyOne, Kraton expects to realize fixed cost savings arising from the sale of the business.
Kraton intends to use proceeds from the sale to reduce outstanding indebtedness.
"Over the years Kraton and PolyOne have enjoyed a significant relationship that has been based upon a mutual appreciation for the value of innovation," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer. "This transaction will enable Kraton to focus on its core strengths around polymer design, and enable PolyOne to focus on its leading capabilities as a provider of polymer formulations. Ultimately, we expect the transaction to lead to additional growth opportunities for both companies," said Fogarty.
Commenting on the transaction, Robert M. Patterson, PolyOne's President and Chief Executive Officer, said, "We are very pleased to have made this investment for our customers and their product design, development and performance goals. In addition, we are pleased to be expanding our relationship with Kraton. We will work together to ensure a swift and seamless transition, as we leverage our collective TPE know-how, global reach and commercial expertise."
Kraton Performance Polymers, Inc. (NYSE "KRA") is a leading global producer of styrenic block copolymers, specialty polymers and high-value performance products derived from pine wood pulping co-products. Kraton's polymers are used in a wide range of applications, including adhesives, coatings, consumer and personal care products, sealants and lubricants, and medical, packaging, automotive, paving, roofing and footwear products. As the largest global provider in the pine chemicals industry, the company's pine-based specialty products are sold into adhesive, road and construction and tire markets, and it produces and sells a broad range of chemical intermediates into markets that include fuel additives, oilfield chemicals, coatings, metalworking fluids and lubricants, inks, flavors and fragrances and mining. Kraton offers its products to a diverse customer base in over 60 countries worldwide.
Kraton, the Kraton logo and design, and the "Giving Innovators their Edge" tagline are all trademarks of Kraton Polymers LLC.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are often characterized by the use of words such as "believes," "estimates," "expects," "projects," "may," "intends," "plans" or "anticipates," or by discussions of strategy, plans or intentions. The statements in this press release that are not historical statements, including statements regarding Kraton's expected realization of fixed cost savings and intended use of proceeds from the sale of the compounding business are forward-looking statements. All forward-looking statements in this press release are made based on management's current expectations and estimates, which involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those expressed in forward-looking statements is contained in Kraton's most recently filed annual report on Form 10-K, quarterly reports on Form 10-Q and in other filings made by Kraton with the U.S. Securities and Exchange Commission, and include, but are not limited to, risks related to: the integration of Arizona Chemical Holdings Corporation; Kraton's ability to repay its indebtedness; Kraton's reliance on third parties for the provision of significant operating and other services; conditions in the global economy and capital markets; fluctuations in raw material costs; limitations in the availability of raw materials; competition in Kraton's end-use markets; and other factors of which we are currently unaware or deem immaterial. Readers are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements contained herein speak only as of the date of this press release, and we assume no obligation to publicly update or revise such forward-looking statements in light of new information or future events.
For Further Information:
H. Gene Shiels
Director of Investor Relations
SOURCE Kraton Performance Polymers, Inc.