Clariant sell masterbatches business PolyOne $1.6 billion
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Waste Management Expo 2020 MAR 12&13 BIEC, Bengaluru, India

Clariant to sell masterbatches business to PolyOne for $1.6 billion

9:17 AM, 19th December 2019
Clariant headquarters
Clariant's headquarters building. (File photo)

MUTTENZ, SWITZERLAND: Clariant has agreed to sell its entire masterbatches business to PolyOne. The transaction values the masterbatches business at $1,560 million, representing c. 12.2 times the last twelve months reported EBITDA (ending September 2019) on a cash and debt free basis.

This amount is payable at closing, which is expected by Q3 2020.

As a consequence of the divestment of the Masterbatches business, as well as the anticipated divestment of the Pigments business by the end of 2020, Clariant’s Board of Directors is proposing an extraordinary cash distribution of CHF 3.00 per share to the Clariant Annual General Meeting to be held on March 30, 2020.

The deal with PolyOne comprises two separate transactions. The global Masterbatches business is sold in a deal valued at $1,500 million, representing c. 12.1 times the last twelve months reported EBITDA (ending September 2019).

Separately, the sale of Clariant’s Masterbatches business in India has been approved by Clariant Chemicals (India) Limited’s Board of Directors and is valued at INR 4,260 million or approx. $60 million, representing c. 17.3 times the last twelve months reported EBITDA (ending September 2019). Clariant Chemicals (India) Limited is listed on the stock exchanges in India with Clariant AG holding a 51% controlling stake.

Clariant’s Masterbatches business offers color and additive concentrates and performance solutions for plastics. Clariant’s Masterbatches help to enhance the market appeal or end-use performance of plastic products, packaging or fibers. In the financial year 2018, the total Masterbatches business generated sales of around CHF 1.181 billion.

“This announcement is a significant milestone on our path to focusing on businesses with above-market growth, higher profitability and stronger cash generation. After the successful divestment of Healthcare Packaging in October 2019 the agreement to sell Masterbatches is an important step in delivering on our strategy defined in 2015 to concentrate on our three core Business Areas Care Chemicals, Catalysis and Natural Resources. As announced, we are confident that we will execute the remaining divestment of our Pigments business in 2020 in order to build the new, more focused and stronger Clariant by 2021,” said Hariolf Kottmann, Executive Chairman of Clariant.

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