BEACHWOOD, Ohio, Feb. 9, 2016 /PRNewswire/ -- In order to put greater focus on its strategic priorities of growing its specialty businesses and improving margins in its traditional core businesses, OMNOVA Solutions (NYSE: OMN) today announced the sale of its India rubber manufacturing business to India-based Apcotex Industries Limited. The transaction includes the Valia, India manufacturing plant and its associated product lines: acrylonitrile butadiene rubber (NBR) in bale form, high styrene rubber masterbatches, and NBR-PVC polyblends.
Importantly, OMNOVA Solutions will maintain its sales office in Mumbai to manage the continued growth of the Company's specialty polymers in the Indian market through imports from other OMNOVA facilities in Asia, Europe and North America.
"This plant and the three small rubber product lines were part of our acquisition of the Eliokem global specialty polymers business. They had few synergies with the rest of the OMNOVA product portfolio," explained Kevin McMullen, OMNOVA Solutions' Chairman and Chief Executive Officer. "This divestiture allows us to place greater focus on our previously stated strategic priorities, including the acceleration of growth in our specialty businesses, such as specialty coatings, nonwovens, oil and gas additives, elastomeric modifiers, construction materials, laminates/films, and coated fabrics.
"While the Valia plant business was not core to OMNOVA, the Indian market remains important to us," emphasized McMullen. "India presents exciting opportunities to grow the more strategic specialty chemicals and additives that we are currently selling into that market: specialty coatings, reinforcing resins, tire cord latex, elastomeric modifiers, antioxidants, and products for oil & gas drilling. We will maintain a sales and market development office in Mumbai, and we plan to leverage our manufacturing and technology capabilities on three continents to remain a strong supplier of differentiated solutions to India and the surrounding region."
The India rubber manufacturing business was sold to Apcotex under a share purchase agreement for cash proceeds of approximately US$5 million. For fiscal 2015, the business generated approximately US$28.2 million in sales and reported a net loss of US$0.4 million. The sale is not expected to have any material impact on OMNOVA's operating income for 2016.
This press release includes descriptions of OMNOVA's current business, operations, assets and other matters affecting the Company as well as "forward-looking statements" as defined by federal securities laws. All forward-looking statements by the Company, including verbal statements, are intended to qualify for the protections afforded forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect management's current expectation, judgment, belief, assumption, estimate or forecast about future events, circumstances or results and may address business conditions and prospects, strategy, capital structure, debt and cash levels, sales, profits, earnings, markets, products, technology, operations, customers, raw materials, claims and litigation, financial condition, and accounting policies among other matters. Words such as, but not limited to, "will," "may," "should," "projects," "forecasts," "seeks," "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "optimistic," "likely," "would," "could," "committed," and similar expressions or phrases identify forward-looking statements.
All descriptions of OMNOVA's current business, operations and assets, as well as all forward-looking statements, involve risks and uncertainties. Many risks and uncertainties are inherent in business generally. Other risks and uncertainties are more specific to the Company's businesses and strategy, or to any new businesses the Company may enter into or acquire. There also may be risks and uncertainties not currently known to the Company. The occurrence of any such risks and uncertainties and the impact of such occurrences is often not predictable or within the Company's control. Such impacts could adversely affect the Company's business, operations or assets as well as the Company's results. In some cases, such impact could be material. Certain risks and uncertainties facing the Company are described below or in the Company's Quarterly Report on Form 10-Q and Annual Report on Form 10-K.
All written and verbal descriptions of OMNOVA's business, operations and assets and all forward-looking statements attributable to the Company or any person acting on the Company's behalf are expressly qualified in their entirety by the risks, uncertainties, and cautionary statements contained and referenced herein. All such descriptions and any forward-looking statement speak only as of the date on which such description or statement is made, and the Company undertakes no obligation, and specifically declines any obligation, other than that imposed by law, to publicly update or revise any such description or forward-looking statements whether as a result of new information, future events or otherwise.
The Company's actual results and the value of your investment in OMNOVA may differ, perhaps materially, from expectations due to a number of risks and uncertainties including, but not limited to: (1) the Company's exposure to general economic, business, and industry conditions; (2) the risk of doing business in foreign countries and markets; (3) changes in raw material prices and availability; (4) the highly competitive markets the Company serves and continued consolidations among its customer base; (5) extraordinary events such as natural disasters, political disruptions, terrorist attacks and acts of war; (6) extensive and increasing governmental regulation, including environmental, health and safety regulations; (7) the Company's failure to protect its intellectual property or defend itself from intellectual property claims; (8) claims and litigation; (9) changes in accounting policies, standards, and interpretations; (10) the actions of activist shareholders; (11) the Company's inability to achieve or achieve in a timely manner the objectives and benefits of cost reduction initiatives; (12) the Company's ability to develop and commercialize new products at competitive prices; (13) the concentration of OMNOVA's Performance Chemicals business among several large customers; (14) the creditworthiness of the Company's customers; (15) the failure of a joint venture partner to meet its commitments; (16) the Company's ability to identify and complete strategic transactions; (17) the Company's ability to successfully integrate acquired companies; (18) unanticipated capital expenditures; (19) risks associated with the use, production, storage, and transportation of chemicals; (20) information system failures and breaches in security; (21) continued increases in healthcare costs; (22) the Company's ability retain or attract key employees; (23) the Company's ability to renew collective bargaining agreements with employees on acceptable terms and the risk of work stoppages; (24) the Company's contribution obligations under its U.S. pension plan; (25) the Company's reliance on foreign financial institutions to hold some of its funds; (26) the effect of goodwill impairment charges; (27) the volatility in the market price of the Company's common shares; (28) the Company's substantial debt position; (29) the decision to incur additional debt; (30) the operational and financial restrictions contained in the Company's indenture; (31) a default under the Company's term loan or revolving credit facility; and (32) the Company's ability to generate sufficient cash to service its outstanding debt.
OMNOVA Solutions Inc. is a global innovator of performance-enhancing chemistries and surfaces used in products for a variety of commercial, industrial and residential applications. As a strategic business-to-business supplier, OMNOVA provides The Science in Better Brands, with emulsion polymers, specialty chemicals, and functional and decorative surfaces that deliver critical performance attributes to top brand-name, end-use products sold around the world. OMNOVA's sales for the fiscal year ended November 30, 2015, were $838 million. The Company has a global workforce of approximately 2,300. Visit OMNOVA Solutions on the internet at www.omnova.com.
SOURCE OMNOVA Solutions Inc.