CLEVELAND, August 12, 2022 /PRNewswire/ — Avient Corporation (NYSE: AVNT ), a leading global provider of durable and specialty material solutions, announced today that it has entered into a definitive agreement to sell its Distribution business to an affiliate of HIG Capital for 950 million dollars in cash, subject to regulatory approval.
asset April 20, 2022, the company announced that it was exploring a sale of its Distribution business, in conjunction with the announcement of an agreement to acquire DSM’s Protective Materials business. The company recently completed that process, culminating in today’s announcement.
“As expected, there were many buyers interested in acquiring the Distribution business and it was a competitive process,” he said. Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation. “Ultimately, we selected HIG Capital based on the strength of their proposition, which values the business at approximately 10x LTM EBITDA and does not include any financing contingency. We are also confident that HIG will be an excellent home for the distribution business and a good partner for Avient as a supplier and customer.”
The company noted that after-tax earnings are approx 750 million dollars proceeds from the sale will be used to pay off short-term debt. Pro forma for the sale of the Distribution business and the upcoming acquisition of DSM’s Protective Materials business, net debt to adjusted EBITDA leverage will be approximately 2.8x at year-end.
Mr. Patterson added, “The sale of the Distribution business and the acquisition of DSM Protective Materials represent the next steps in our specialty transformation that began more than a decade ago. We are excited about our future as a pure specialty formulator of stable solution games.”
In accordance with US GAAP, the company expects the distribution business to be classified as “held for sale” and reported as a discontinued operation in future filings.
The company noted that Moelis & Company LLC and Goldman Sachs served as financial advisors to Avient. Jones Day served as external legal counsel. The sale is subject to the satisfaction of regulatory requirements and other customary closing conditions.
Avient Corporation (NYSE: AVNT ) provides specialized and sustainable material solutions that transform customer challenges into opportunities, bringing new products to life for a better world. Examples include:
- Unique technologies that improve product recyclability and enable the inclusion of recycled content, thus advancing a more circular economy
- Lightweight solutions that replace traditional heavier materials such as metal, glass and wood, which can improve fuel efficiency in all modes of transport and reduce carbon footprint
- Sustainable infrastructure solutions that increase energy efficiency, renewable energy, conservation of natural resources and fiber optic / 5G network access
Avient employs approximately 8,800 associates and is ACC Responsible Care® certified, a founding member of the Alliance to End Plastic Waste, and Great Place to Work® certified. For more information, visit www.aient.com.
In this press release, statements not reporting 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 provide 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 or implied by forward-looking statements. They use words such as “will,” “anticipate,” “estimate,” “expect,” “project,” “aim,” “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, uncertainties or volatility in the credit markets that could adversely affect the availability of already arranged credit and availability and cost. of credit in the future; the effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory risks, including recessionary conditions; the current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial position or cash flows, including without limitation, any supply chain and logistics issues; changes in polymer consumption growth rates and plastics-related laws and regulations in jurisdictions where we do business; fluctuations in raw material prices, quality and supply, as well as energy prices and supply; production interruptions or material costs associated with planned or unplanned maintenance programs; unforeseen developments that may occur in connection with contingencies such as litigation and environmental matters; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; information systems failures and cyber attacks; amounts for cash and non-cash charges related to restructuring plans that may differ from original estimates, including due to timing changes related to the underlying actions; any material adverse change in the business supporting the assets of the Distribution being sold; the ability to obtain required regulatory or third-party approvals and consents and otherwise consummate the proposed sale of the Distribution business; any material adverse change in the Defense Materials Business proposed to be acquired by Royal DSM (“DSM”); our ability to achieve strategic and other objectives in connection with the proposed acquisition of DSM’s Protective Materials business and the proposed sale of the Distribution business; and other factors described in our Annual Report on Form 10-K for the year ended December 31, 2021 under Item 1A, “Risk Factors”. The above list of factors is not exhaustive.
We undertake no obligation to publicly update any 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 topics in our reports on Form 10-Q, 8-K and 10-K that we file with the Securities and Exchange Commission.
The Company does not provide reconciliations of forward-looking non-GAAP financial measures, such as the outlook for net debt to adjusted EBITDA leverage, to the most comparable GAAP financial measures on a forward-looking basis because the Company is not in able to provide a meaningful understanding or accurate calculation or estimation of the reconciling items and information is not available without reasonable effort. This is due to the inherent difficulty of predicting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition-related costs and other non-routine costs. Each of these adjustments has not yet occurred, is beyond the Company’s control and/or cannot be reasonably anticipated. For the same reasons, the Company is unable to address the potential relevance of unavailable information.
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SOURCE Avient Corporation