MOSCOW (MRC) -- Plastics manufacturer A. Schulman Inc. has agreed to buy Citadel Plastics for USD800 million, a move to expand its product portfolio into specialty plastics and gain access to new industries, said The Wall Street Journal.
Chicago-based Citadel, a portfolio company of private-equity firms HGGC and Charlesbank Capital Partners, engineers specialty thermoset composites, which are used in industries including transportation, electrical and health care. It had about USD525 million in pro forma revenue last year and has more than 2,000 products.
"Their product offering not only enhances our existing portfolio, but presents attractive expansion opportunities in other fast-growing sectors such as aerospace, medical, LED lighting and oil and gas," said Chief Executive Bernard Rzepka , who added the acquisition will help its portfolio become more highly specialized.
The deal is expected to add to earnings in the first 12 months of ownership, and could contribute as much as USD25 million within 18 months, due mostly to sourcing and plant efficiency actions.
Acquisitions are a key strategy for the Ohio-based company. In the past five years, it has completed 10 acquisitions and three joint ventures, which contributed 30% of sales last year.
A. Schulman, which has a market capitalization of USD1.2 billion, will fund the transaction with long-term debt and senior unsecured notes. The deal is expected to close before the end of the year.
As MRC informed before, A. Schulman signed an agreement and a strategic partnership with the South Korean polymer producer INITZ for the compounding and marketing of INITZ Co. Ltd.'s ECOTRAN Polyphenylene Sulfide (PPS) compounds.
A. Schulman is a global plastics supplier, headquartered in Akron, Ohio, and a leading international supplier of high-performance plastic compounds and resins, which are used as raw materials in a variety of markets. A. Schulman has 33 manufacturing facilities globally. A. Schulman's fiscal third-quarter earnings fell 69% amid continued sluggishness in European markets and higher-than-expected costs in Latin America, where the company has been consolidating its Brazilian operations.
MRC