Credit: Shutterstock photoChemical company, PolyOnePOL has purchased Mesa, a North American producer of color and additive materials and services, for an undisclosed price.
Mesa produces solid and liquid colorant technologies and serves a vast range of end markets including packaging, consumer products and outdoor equipment. The entity operates two facilities in Phoenix, AZ and Fort Smith, AR.
This marks PolyOne's fourth specialty color acquisition in the last eight months. The acquisition further expands the company's portfolio of color and additives solutions. The company plans to provide more details on the buyout in its second-quarter earnings call.
PolyOne, last month, also purchased specialty inks maker, Rutland Holding Company. Rutland is a leading manufacturer of screen printing inks for the apparel market. The acquisition expands PolyOne's portfolio of specialty color, additives and inks solutions.
PolyOne also recently landed a definitive deal to divest its Designed Structures and Solutions ("DSS") business to private equity firm, Arsenal Capital Partners for $115 million. The DSS business includes sheet, rollstock and packaging assets.
The DSS unit was created in Mar 2013 as a result of the company's acquisition of plastic products maker, Spartech Corporation. Sales from the unit fell roughly 11% year over year to $401.7 million in 2016. The business also recorded an operating loss of $3.8 million last year.
PolyOne said that the decision to sell the business came after assessing several strategic options. PolyOne also noted that it will be required to record the DSS business assets at fair value less an amount of estimated sale costs. PolyOne expects this to result in an after-tax charge of $220 million in the second quarter of 2017. The sale is expected to complete in third-quarter 2017.
PolyOne has underperformed the Zacks categorized Chemicals-Plastics industry over a year. The company's shares have gained around 1% over this period, compared with roughly 11.3% gain recorded by the industry.
PolyOne currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Better-placed companies in the chemicals space include Albemarle Corporation ALB , FMC Corporation FMC and Eastman Chemical Company EMN , all sporting a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Albemarle has an expected long-term earnings growth of 14.5%.
FMC has an expected long-term earnings growth of 11%.
Eastman Chemical has an expected long-term earnings growth of 7.9%.
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Eastman Chemical Company (EMN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
