Nexeo Solutions Merges with WL Ross Holding

Major US chemicals and plastics distributor Nexeo Solutions is merging with WL Ross Holding (WLRH), a New York-based private equity firm, in a deal valued at nearly $1.6 billion.

The current majority owner of Nexeo, investment firm TPG Capital, expects to retain a stake of around 35% in the new company.

Reports surfaced in October 2015 that TPG was exploring a sale or initial public offering for the distribution company. TPG purchased Nexeo from US specialty chemicals producer Ashland for $979 million in April 2011.

Following the merger, WL Ross will change its name to Nexeo Solutions and apply to trade on the NASDAQ stock exchange under the ticker symbols NXEO, NXEOU and NXEOW.

“This transaction allows us to align our ownership structure in a way that accelerates our progress towards defining distribution,” said Nexeo president and CEO, David Bradley. “With a strong, centralized operating platform and access to multiple sources of capital, I believe we will be positioned to grow organically and through acquisition.”

Wilbur Ross, Jr, chairman of WLRH, said it had looked at a number of potential acquisitions over the last two years. “We believe the company is an ideal platform to further roll up the fragmented chemicals and plastics distribution space,” he said.

Nexeo is North America’s leading plastics distributor, and the third largest chemicals distributor by revenue, behind Brenntag and Univar. It reported revenues for 2015 of $3.9 billion.

Bradley is expected to continue leading the Nexeo Solutions management team with Wilbur Ross, Jr serving as chairman.

Completion of the merger is subject to shareholder and regulatory approvals.