Plastics Distribution Business may be divested following a Strategy Review
Global chemical and ingredients distributor Univar Inc. (Downers Grove, IL – United States) and global chemicals and plastics distributor Nexeo Solutions, Inc. (The Woodlands, TX – United States) announced today that the two companies have entered into a definitive agreement for Univar to acquire Nexeo in a cash and stock transaction valued at approximately US$ 2.0 bn or US$ 10.65 per share. This includes the assumption of Nexeo’s debt and other obligations.
Univar said the transaction is expected to be accretive to its Adjusted EPS, beginning in the first full year following closing. The “highly synergistic combination” is expected to deliver US$100 mn, or US$ 0.43 per share after-tax, of annual run-rate cost savings by the third year following close. It will also result in an immediate reduction of annual capital expenditures of approx. US$15 mn per year, the statement said. Univar intends to finance the cash portion of the transaction and refinance Nexeo’s existing debt with a combination of available cash and bank financing, for which it has received commitments.
The transaction has been unanimously approved by the Boards of Directors of Univar and Nexeo respectively, but is still subject to the approval of shareholders of both companies. Nexeo’s key stockholders, TPG and First Pacific, have agreed to provide consent for the proposed transaction. Following the receipt of regulatory approvals and satisfaction of other customary conditions, closing is expected to take place during the first half of 2019.
According to the press relase, Univar has also hired an external advisor “to evaluate strategic alternatives for Nexeo’s … Plastics business, which may include a potential divestiture of the business.”
Source: Univar / Nexeo press release
HGE – DCG / 17.09.2018