Private equity firms Investindustrial and Black Diamond Capital Management have taken over Hexion PSR, a global company active in the production of specialty phenolic resins, engineered thermoset molding compounds and formaldehyde, and has a strong positioning in both Europe and North America. The seller is the New York-listed group, Hexion Inc (see here the funds’ press release and here Hexion’s press release).The company changed hands for 425 million dollars, of which 335 millions paid at closing and inclusive of certain liabilities assumed by the buyer and the remainder relating to future income based on the company’s performance for the remainder. The closing of the transaction is scheduled for the first quarter of 2021.
Hexion PSR is a major player in the phenolic resins sector, boasting a significant presence in Europe, a strong commercial positioning and geographic diversification, as well as a leadership position in almost all the categories in which it operates. The company has 11 manufacturing plants and a global network that includes 3 research and development centers and 4 laboratories dedicated to the development of new applications in close collaboration with customers. Hexion PSR recorded overall revenues of approximately 530 million dollars in the year to June 30, 2020.
Black Diamond and Investindustrial commented: “We are delighted to acquire these strategic assets that boast historical and globally recognized brands, including Bakelite, Durite, Cellobond and Resonance, as well as quality manufacturing facilities, supported by first-rate R&D and technical assistance platforms. Black Diamond and Investindustrial have collaborated successfully in the past thanks to the investment in Polynt-Reichhold and we are thrilled to be working together again, also bringing our previous experience in the polyester resin industry. ”
In May 2016, the two private equity companies created Polynt-Reichnold, born from the merger between Polynt spa, a leading Italian company in the production of intermediate polymers and composite materials (which Investindustrial has controlled since 2008 through Polimeri Speciali Holding spa) and Reichhold Industries, controlled by a group of private equity funds led by Black Diamond Capital Management and which also includes JP Morgan Investment Management, Third Avenue Management and Simplon Partners. The funds, which had invested in Reichold’s senior bonds which defaulted in 2014, then took control of the group by converting their credit into equity and supporting the relaunch of the business (see here a previous article by BeBeez). The acquisition of Hexion was not made through Polynt-Reichnold, but given that it is also part of the same sector, it is not excluded that the companies may merge and form a single group in the future.
Founded in 1995, Black Diamond is a leading investment firm with over $ 8 billion in assets under management through complementary private equity and credit platforms operating from offices in Greenwich, CT and London.
Investindustrial is an independently managed European investment, holding and advisory group with 11 billion euros in funds raised. For over 30 years, the company has provided mid-market companies with capital, industrial expertise, operational support and a global platform to accelerate the creation of sustainable value and their international expansion.