Less than a month after inking a deal to sell its epoxy resins business to Westlake Chemical, Hexion Holdings has agreed to sell the rest of itself to the private equity firm American Securities for $30.00 per share. The deal values the company’s stock at nearly $1.8 billion.
American Securities will get a business with 1,300 employees and annual sales of nearly $1.4 billion. About 85% of the sales come from Hexion’s adhesives business, a large supplier of formaldehyde-based glues that go into wood applications such as plywood and oriented strand board.
The balance of Hexion is called Versatic Acids and Derivatives. Included in this business are carboxylic acids such as neopentanoic acid, used as an intermediate to make peroxyesters, and neodecanoic acid, an intermediate and metal extraction chemical. The business also makes vinyl esters for decorative paints and glycidal esters for auto and industrial coatings.
In November, Hexion agreed to sell its epoxy business to the chlor-alkali giant Westlake Chemical for $1.2 billion.
Before announcing the American Securities deal, Hexion had been planning an initial public offering on the New York Stock Exchange. Hexion say the $30-per-share deal represents a 15% premium over recent share prices. Some of its shares are traded over the counter in private transactions.
Another private equity firm, Apollo Global Management, had controlled Hexion until 2019, when Hexion filed for bankruptcy. Now Hexion is mostly owned by financial firms that had been creditors. The largest is GoldenTree Asset Management, which owns nearly 20% of Hexion.
American Securities is no stranger to the chemical industry. It owned the benzoic acid specialist Emerald Kalama Chemical, which it sold this summer to Lanxess for just over $1 billion. In 2016, American Securities sold the pine chemical maker Arizona Chemical to Kraton for about $1.4 billion.
American Securities managing director Scott Wolff said in an announcement that Hexion is “well-aligned with global megatrends, including safety and sustainability requirements and regulations, population growth, and household formation.”