US Hexion to sell phenolic specialty, two other businesses for $425m

HOUSTON (ICIS)–Hexion has agreed to sell three businesses to a team of private-equity firms made up of Black Diamond and Investindustrial, the US-based thermoset resin producer said on Monday.

The two firms are buying Hexion’s Phenolic Specialty Resins, Hexamine and the European-based Forest Products Resins businesses, Hexion said.

The agreement consists of $335m in cash and some liabilities. The rest of the money will come from future proceeds based on the performance of the businesses, Hexion said.

The deal should close in the first quarter of 2021. Hexion plans to spend the money on its businesses and on reducing debt.

The three businesses reported sales of $530m for the last 12 months that ended on 30 June, Hexion said. They include 11 plants and 900 employees.

The Phenolic Specialty Resins business includes Bakelite, which is regarded as the first synthetic plastic. Other brands and trademarks in the deal include Durite, Cellobond and Resonance.

The Forest Products Resins business includes polymers based on formaldehyde. These formaldehyde-based resins are used to bind wood to make engineered lumber products such as medium-density fibreboard (MDF), particle board and oriented-strand board (OSB).

Black Diamond and Investindustrial have teamed up in the past, notably in the merger between Reichhold and Polynt, which was completed in 2017, the two said.

The merged company makes unsaturated polyester resins (UPR), something also produced by one of the businesses they are acquiring from Hexion.

The two noted that Black Diamond has prior experience investing in phenolic resins.

Credit Suisse is acting as Hexion’s financial advisor; and Paul, Weiss, Rifkind, Wharton & Garrison as legal counsel.

Thumbnail image shows dice made of Bakelite. Photo by Shutterstock