Hexion Holding to be Sold to American Securities
The backers of Hexion Holdings have agreed to sell the company to private equity investor American Securities for $30 per share in cash. The transaction is expected to complete in the first half of 2022, following the closing of the sale of its Epoxy business to Westlake Chemical. That deal is still subject to shareholder and regulatory approval.
Hexion said the owners of a majority of the outstanding shares in the holding have agreed to support the transaction, pursuant to voting agreements entered into in connection with the transaction. Up to now, the majority shareholder has been private equity giant Apollo Global Management.
Without disclosing the number of shares altogether or an enterprise value, the holding said the transaction “delivers substantial value” to shareholders. The agreed price per share represents a 15% premium to the price at the close of December 17, 2021. Weighed against the closing price on Jul. 30, 2021, the day before the plans for a strategic review of assets was announced, the premium amounts to 53%.
In August, Hexion filed a confidential draft registration statement with the US Securities and Exchange Commission for an initial public offering, possibly by the end of the year. It is unclear what prompted the change of plans.
At the end of September, two months before unveiling plans to sell the Epoxy assets to Westlake, Hexion announced it would split into two independent companies. The entity continuing to use the name Hexion Holdings incorporates the adhesives and versatic acids and derivatives product lines.
For 2020, Hexion reported sales of $2.5 billion. Factoring out the divested Epoxy arm, the finally sales tally stands at $1.4 billion. The business remaining under the Hexion name is a global producer of adhesives and performance materials that enable production of engineered wood products and other specialty materials. Led by Craig Rogerson as chairman, president and CEO, the company has 27 manufacturing facilities globally and some 1,300 employees.
After the latest asset trim that follows years of combinations and re-combination, observers are speculating on whether the latest iteration of the Columbus, Ohio-headquartered chemical producer will be its last. As Hexion Specialty Chemicals, the company first took shape in 2005 with the merger of US players Borden Chemical, Resolution Performance Products / Resolution Specialty and Bakelite under the Apollo umbrella. The now 16-year-old producer of resins and compounds was planned to be stock market-listed “in the near future.”
Author: Dede Williams, Freelance Journalist
