MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics and latex binders, has announced the closing of the previously announced transaction to sell its synthetic rubber business based in Schkopau, Germany to Synthos S.A. and its affiliates, as per the company's press release.
The sale was made for an enterprise value of approximately USD491 million, comprised of a cash purchase price of USD402.4 million, the assumption of approximately USD41.6 million of pension liabilities by Synthos, and net working capital (excluding inventory) retained by Trinseo of USD47.0 million.
In October, Trinseo and Synthos entered into an amendment to the original purchase agreement to reduce the cash purchase price from USD449.4 million to USD402.4 million in exchange for an equivalent amount (USD47.0 million) of net working capital to be collected by Trinseo. Following Trinseo’s collection of the net working capital, the expected net cash proceeds are approximately USD400 million after transaction-related costs and taxes.
The Business includes approximately 440 employees, mostly located in Schkopau, Germany. The transaction also includes the transfer of the associated Schkopau-based manufacturing and research and development facilities, as well as related intellectual property.
Trinseo’s sale of Synthetic Rubber to Synthos is another step forward in a series of strategic actions, including the recent acquisitions of Arkema's PMMA business in May 2021 and Aristech Surfaces LLC in September 2021, as well as the planned divestiture of its styrenics businesses, for which a formal sales process is expected to launch in the first quarter of 2022. These steps are part of the company’s transformation into a higher growth, higher margin and less cyclical specialty and sustainable materials provider.
The main application, consuming approximately 75% MMA, is in the production of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used to produce methyl methacrylate-butadiene-styrene copolymer (MBS), used as a modifier for polyvinyl chloride (PVC).
According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 828,600 tonnes in the first ten months of 2021, up by 3% year on year. At the same time, only two producers raised their output.
Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.