Avient Corp. (Cleveland, Ohio) announced it has entered into a definitive agreement to sell its Distribution business to an affiliate of H.I.G. Capital for $950 million in cash, subject to regulatory approval.
On April 20, 2022, the company announced it was exploring a sale of its Distribution business, in connection with announcing an agreement to acquire the Protective Materials business of DSM. The company recently completed that process, culminating in today’s announcement.
“As expected, there were multiple buyers interested in acquiring the Distribution business, and it was a competitive process,” said Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation. “Ultimately, we selected H.I.G. Capital based on the strength of their proposal, which values the business at approximately 10x LTM EBITDA and includes no financing contingencies. We are also confident that H.I.G. will make an excellent home for the Distribution business and a good partner for Avient as both a supplier and a customer.”
The company noted that after-tax proceeds of approximately $750 million from the sale will be used to pay down near-term maturing debt. Pro forma for the sale of the Distribution business and the forthcoming acquisition of DSM’s Protective Materials business, net debt to adjusted EBITDA leverage will be approximately 2.8x at the end of the year.
Mr. Patterson added, “The sale of the Distribution business and acquisition of DSM Protective Materials represent the next steps in our specialty transformation that began over a decade ago. We are excited about our future as a pure play specialty formulator of sustainable solutions.”
In accordance with US GAAP, the company expects the Distribution business will 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 outside legal counsel. The sale is subject to satisfaction of regulatory requirements and other customary closing conditions.