HOUSTON (ICIS)--Hexion completed the $425m sale of its phenolic specialty resins business as well as two other businesses to a team of private-equity firms made up of Black Diamond and Investindustrial, the US-based thermoset resins producer said on Friday.
The other two businesses are the company's Hexamine business and its European Forest Products Resins business. The $425m is made up of $335m in cash, some assumed debt and future proceeds based on the performance of the businesses.
Hexion will use the money to invest in its remaining businesses and to pay down debt.
The three businesses reported sales of $530m for the last 12 months that ended on 30 June 2020, Hexion said when it announced the deal in September. 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.
Black Diamond and Investindustrial did not immediately respond to a request for comment.
Hexion CEO Craig Rogerson said, "This sale strengthens our balance sheet, while maintaining a strong specialty chemical portfolio going forward."
Credit Suisse acted as Hexion’s financial advisor, Paul, Weiss, Rifkind, Wharton & Garrison as lead legal counsel, and Freshfields Bruckhaus Deringer as European counsel.
Thumbnail image shows dice made of Bakelite. Image by Shutterstock