CLEVELAND, Oct. 3, 2011 /PRNewswire/ -- PolyOne Corporation (NYSE: POL), a premier global provider of specialized polymer materials, services and solutions, today announced an agreement to acquire ColorMatrix Group, Inc., the leading global innovator in liquid colorants, additives and fluoropolymers.
"I am extremely pleased to announce we've reached an agreement to acquire ColorMatrix, an exceptional and unique specialty company," said Stephen D. Newlin, chairman, president and chief executive officer, PolyOne Corporation. "Much like our acquisition of GLS in 2008, ColorMatrix is a game-changer for PolyOne. With the addition of ColorMatrix, more than 50 percent of PolyOne's operating income will now be derived from our specialty businesses, compared to only 2 percent in 2005."
ColorMatrix is the leading manufacturer of performance-enhancing specialty additives, liquid colorant and dosing technologies that serve diverse niche markets, such as rigid beverage and food packaging, performance molding and fiber. The company's leadership position in technology is evidenced by an IP portfolio of 162 patents and 107 pending applications worldwide. Its solutions in packaging, in particular, offer customers exceptional performance attributes such as increased product shelf life, taste preservation and improved recyclability.
Further, ColorMatrix is a leading global provider of colorant for fluoropolymers and provides specialty additives that support fluoropolymers' unique high-performance properties such as lubricity, high-level heat insulation, static dissipation and x-ray opaqueness. Through its April 2011 acquisition of Gayson, ColorMatrix expanded its portfolio to include short turnaround, custom color dispersions used in silicone processing for a broad range of medical, consumer and automotive applications.
Under the leadership of CEO John Gelp and a strong management team, ColorMatrix achieved sales and EBITDA of approximately $196.8 million and $43.6 million respectively for the 12 months ended June 30, 2011.
"Since 2002, ColorMatrix has organically increased EBITDA at an annualized growth rate of 16 percent, and our purchase price of $486 million recognizes the earnings and growth potential of this specialty business," said Newlin. "We believe we can accelerate this growth by leveraging our global scale and through additional investment in commercial resources, just as we've done with GLS."
"Not only will the acquisition of ColorMatrix accelerate our specialization strategy, it also expands our geographic presence in Asia and Brazil and creates an entry point into Russia," said Robert M. Patterson, executive vice president and chief financial officer. Approximately 70 percent of ColorMatrix's revenues are outside North America.
PolyOne intends to finance the purchase price of $486 million, which includes transaction tax benefits of $10 million, with a combination of cash on hand and the addition of approximately $300 million of long term debt. The acquisition is being made on a cash free, debt free basis, and the purchase price is subject to a customary working capital adjustment and other closing conditions.
"Net of interest expense on the long term debt, and the incremental investments in commercial resources, we expect ColorMatrix to be modestly accretive to earnings in 2012 ($0.02-$0.03 per share) and to add approximately $0.10-$0.12 per share in 2013," added Patterson.
This acquisition is subject to regulatory approvals and is expected to close late this year. PolyOne management will discuss the acquisition in more detail during its regularly scheduled third quarter earnings conference call to be held on October 26, 2011.
PolyOne Corporation, with 2010 revenues of $2.6 billion, is a premier provider of specialized polymer materials, services and solutions. Headquartered outside of Cleveland, Ohio USA, PolyOne has operations around the world. For additional information on PolyOne, visit our Web site at www.polyone.com.
ColorMatrix Group Inc., based in Berea, Ohio, is a leading specialty provider of innovative liquid colorants and additives business that serves diverse segments, including rigid beverage and food packaging, industrial extrusion, performance molding, wire, cable, fiber, and silicone rubber markets. ColorMatrix has operations, R&D capabilities and customer reach throughout the globe. For additional information on ColorMatrix, visit its Web site at www.colormatrix.com.
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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: 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 and chlor-alkali markets; 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 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, employee productivity goals and our new global organization structure; an inability to raise or sustain prices for products or services; an inability to maintain appropriate relations with unions and employees; the inability to achieve expected results from our acquisition activities; the ability to successfully complete the acquisition of ColorMatrix, including our ability to obtain the requisite financing; the ability to successfully integrate ColorMatrix and achieve the expected results from the acquisition, including the acquisition being accretive; the ability to retain Color Matrix's management team and its relationships with customers; 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.
SOURCE PolyOne Corporation