Specialty polymer materials maker
) announced that it will realign its North American manufacturing
assets in relation to its acquisition of Spartech Corporation in
Mar 2013. The step is in sync with the company's strategy to
integrate PolyOne and Spartech and increase its specialty
PolyOne plans to shut down six manufacturing plants and
relocate production to other PolyOne facilities by the end of
2014. As a result of this, PolyOne expects to generate annualized
pre-tax savings of roughly $25 million in 2015. The company
expects to incur cash costs of about $45 million over the next
12-18 months, mainly related to severance, asset relocation and
additional capital investment. These actions are also expected to
reduce the headcount by about 250.
PolyOne expects to realize about $65 million of synergies from
the Spartech acquisition and 50 cents of earnings per share
accretion upon full synergy capture.
As a result of the realignment, PolyOne expects to take $35
million over the next 12-18 months which includes about $20
million related to cash charges and about $15 million related to
non cash charges.
PolyOne has been taking strategic actions to realign its
portfolio and recently sold its vinyl dispersion, blending and
suspension resin assets to Mexichem, S.A.B. de C.V. for $250
million in cash. The sale included only those assets that were
related to resin production including manufacturing plants in
Pedrick town, N.J., Henry, Ill., and a resin research facility in
Avon Lake, Ohio.
The divestiture of the base resin assets is consistent with
PolyOne's strategy of focusing on its core competence of material
science formulation for specialty applications. This is in sync
with the company's improvement plan, which has delivered
substantial shareholder value over the last five years.
PolyOne which is among the prominent players in the
chemical-plastics industry along with
Westlake Chemical Corp.
A. Schulman, Inc.
), is a leading provider of specialized polymer materials,
services and solutions.
PolyOne currently retains a Zacks Rank #2 (Buy).
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