Univar Sells Nexeo Plastics to One Rock Capital
Following a strategic review, Univar has agreed to sell Nexeo Plastics to an affiliate of private equity group One Rock Capital Partners for an enterprise value of $640 million.
The sale comes less than six months after Univar agreed to pay around $2 billion for rival distributor Nexeo Solutions last September, a move that will combine the world’s second and fifth largest distributors. Univar’s president and CEO David Jukes said at that time that it might sell off Nexeo’s plastics business, which accounted for half of sales and one third of EBITDA.
Jukes said the divestment will allow Univar to concentrate on its core chemical distribution business and the “abundant value creation opportunities” from the merger with Univar.
Shawn Williams, executive vice president for plastics at Nexeo Solutions, commented: “We look forward to operating as a pure-play plastics business and will focus our talent and resources on expanding our service offering for our suppliers and customers worldwide.”
Univar expects the sale to result in net cash proceeds of at least $615 million, which will be used immediately to pay down debt.
The boards of both Univar and Nexeo Solutions have approved the deal, which is anticipated to close in the first half of 2019, subject to regulatory approvals and other customary conditions. These conditions include those relating to Univar’s acquisition of Nexeo, which is due to complete in the same time frame.