Dow Chemical Co. has completed the sale of its Styron plastics unit to Bain Capital for $1.63 billion. Dow retained a 7.5% equity position, although it had an option to retain up to 15 percent.
The Dow Chemical Company and Bain Capital Partners, a leading global private equity firm, announced jointly today that they have closed the sale of Dow’s Styron Division to an affiliate of Bain Capital. Dow has elected to retain a 7.5 percent equity position in Styron, which is now a privately held, global materials company. Also included in the transaction are several long-term supply, service and purchase agreements between Dow and Styron that will generate substantial additional value for both companies.
“The Styron divestiture is another major step in Dow’s transformation and a strong example of our disciplined approach to portfolio management and business prioritization,” said Andrew N. Liveris, Dow Chairman and Chief Executive Officer. “With the close of this transaction, we have exceeded our goal of divesting $5 billion of non-strategic assets, and we have done so in just five quarters. These divestitures have enabled Dow to both reduce debt and liberate capital and resources for Dow’s higher growth, higher margin businesses.”
“We are excited to see Styron emerge as an independent company. The Styron management team, together with our new partners at Dow, have worked tirelessly to provide Styron with the capabilities to pursue its global growth strategy,” said Steve Zide, a Managing Director at Bain Capital. “We are confident that the management team led by Chris Pappas, and all of Styron’s employees around the world, will further expand and strengthen the Company’s leadership positions with a continued commitment to excellent service to customers and business partners.”
Styron is positioned as a leading materials company with global reach and a unique product portfolio, bringing together plastics, rubber and latex businesses that share feedstocks, operations, customers and end users. Styron has approximately $3.7 billion in revenue (based on 2009 data), with manufacturing facilities at 20 locations in 13 countries around the world. Styron has approximately 2,000 employees based in 30 countries worldwide.
Businesses and products included in this transaction are: Styrenics – Polystyrene (PS), acrylonitrile butadiene styrene (ABS), styrene acrylonitrile (SAN) and expandable polystyrene (EPS); Emulsion Polymers (paper and carpet latex); Polycarbonate (PC) and Compounds & Blends; Synthetic Rubber; Automotive Plastics; and some styrene monomer assets.
Dow announced its plan to form the Styron Division and explore divestiture options in July 2009. A definitive agreement between Dow and Bain Capital Partners was signed and announced in March 2010.
About the Products in Styron
Polycarbonate (PC) is an engineering thermoplastic used in applications such as optical media, electrical and lighting. Styrenic plastics (polystyrene, ABS and SAN) are well known for their performance in an array of applications from packaging and food service, to large appliances, portable appliances, consumer electronics, automotive and building and construction. Synthetic rubber is used in a broad portfolio of products from tires to hoses, conveyor belts and footwear, to specialized high- performance elastomers. Expandable polystyrene (EPS) is typically used in rigid foam products such as heat insulation, packaging, impact sound insulation and drainage. SB and SA Latex are used in paper/paperboard and flooring applications. Automotive plastics are used in many different automotive applications such as instrument panels, mid consoles, door panels, interior trim, seat structures and bumpers.
About The Dow Chemical Company
Dow combines the power of science and technology with the “Human Element” to passionately innovate what is essential to human progress. The Company connects chemistry and innovation with the principles of sustainability to help address many of the world’s most challenging problems such as the need for clean water, renewable energy generation and conservation, and increasing agricultural productivity. Dow’s diversified industry-leading portfolio of specialty chemical, advanced materials, agrosciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in approximately 160 countries and in high growth sectors such as electronics, water, energy, coatings and agriculture. In 2009, Dow had annual sales of $45 billion and employed approximately 52,000 people worldwide. The Company’s more than 5,000 products are manufactured at 214 sites in 37 countries across the globe. References to “Dow” or “the Company” mean The Dow Chemical Company and its consolidated subsidiaries unless otherwise expressly noted. More information about Dow can be found at www.dow.com.
About Bain Capital
Bain Capital, LLC (www.baincapital.com) is a global private investment firm that manages several pools of capital including private equity, venture capital, public equity, high-yield assets and mezzanine capital with approximately $65 billion in assets under management. Bain Capital has a team of over 300 professionals dedicated to investing and to supporting its portfolio companies. Since its inception in 1984, Bain Capital has made private equity investments and add-on acquisitions in over 300 companies in a variety of industries around the world. Bain Capital has a long history of investments in industrial businesses, including such leading companies as Innophos, Brenntag, Sensata, SigmaKalon, FCI, Feixiang Chemicals, Novacap, and Himadri Chemicals. Headquartered in Boston, Bain Capital has offices in New York, London, Munich, Hong Kong, Shanghai, Tokyo, and Mumbai.