Article Number : 4628 |
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| Date | 7/7/2009 9:06:50 AM |
| Written By | LGM & Associates Technical Flooring Services |
| View this article at: | //floorbiz.com/BizResources/NPViewArticle.asp?ArticleID=4628 |
| Abstract | St. Louis—Solutia announced it has completed the $50 million sale of its nylon business to an affiliate of SK Capital Partners II. The sale includes all five of its manufacturing plants in... |
| Article | St. Louis—Solutia announced it has completed the $50 million sale of its nylon business to an affiliate of SK Capital Partners II. The sale includes all five of its manufacturing plants in Alvin, Tex.; Decatur, Ala.; Greenwood, S.C.; Pensacola, Fla., and Foley, Ala. The nylon unit included 2,000 of Solutia’s 5,100 employees. SK, a transformational private investment firm, paid Solutia cash (subject to a working capital adjustment) for its nylon assets. Solutia also received a 2% equity stake in the new company formed to hold substantially all of the assets of the nylon business, which will continue without interruption under the name of the new operating company, Ascend Performance Materials. In addition, Solutia, which took in approximately $1.8 billion in revenues in 2008, will receive $4 million in deferred cash payments to be paid in annual $1 million installments beginning in 2011. Frederic Poses, former chairman and CEO of American Standard and COO of AlliedSignal, will lead the Ascend management team, while Timothy Strehl continues as president of the company. “We’re attracted by the growth opportunities that exist within Ascend’s businesses,” said Poses, “which have solid fundamentals, a strong customer base and talented people. Ascend, as an independent company, will be focused on leveraging our leading technology to develop innovative products for our global customer base. SK brings valuable experience in all aspects of the business.” Barry Siadat, managing director of SK, said, “Ascend is an excellent fit with our strategy to invest in businesses where we have expertise in order to capitalize on significant upside potential and generate superior returns for our investors.” He added, completing the transaction despite the difficult financing market, “bodes well for our investors as we continue to look at a number of attractive opportunities in our target sectors.” Jamshid Keynejad, managing director of SK, believes the acquisition “marks a key milestone for Ascend. We look forward to working to build on the company’s heritage and strong industry position to enable it to reach its full potential. As in the case of Ascend, we believe this is an opportune time to acquire good businesses at attractive valuations and utilize our operational capabilities to drive significant value for our investors.” SK also has secured replacement of $25 million of letters of credit associated with the nylon business, which has resulted in increased availability for Solutia under its credit agreements. The affiliate of SK Capital will assume substantially all of the liabilities of the nylon business, including employee and pension liabilities relating to the active employees of the business and environmental liabilities. Solutia used the proceeds of the nylon sale to pay down debt under its asset-based revolving credit facility. “This sale completes our transformation into a pure-play performance materials and specialty chemicals company, with a portfolio of high-value products that hold world-leading positions,” said Jeffry Quinn, chairman, president, and CEO of Solutia. With the sale of the nylon division, Solutia’s portfolio now consists of three business segments— Saflex, Technical Specialties, and CPFilms. Quinn added, “Solutia is well positioned to generate consistent financial returns and develop and enhance its position in the specialty chemicals sector.” For more, visit ascentmaterials.com. |