M&As: Ravago acquires equity in recycling firm Alterra Energy; Trinseo buys PMMA sheet firm Aristech for US$445 mn

Luxembourg-headquartered Ravago, which provides distribution, resale, compounding and recycling services, has acquired an equity interest in polymer recycling and distribution firm Alterra Energy. Terms were not disclosed. Ravago will be a strategic partner in supplying pre-processed waste plastic to Alterra Energy's Akron, Ohio, facility -- which currently has the capacity to liquefy up to 60 tonnes/day of waste plastic for use as a feedstock for the manufacturing of plastics and chemicals -- as well as for future commercial installations.

Alterra Energy and Ravago plan to combine forces to provide integrated recycling solutions that support the transition toward decarbonization, decreasing virgin fossil resource dependency and increasing circularity for its petrochemical and chemical partners.

The Ravago transaction is the second strategic partnership this year for Alterra Energy. In January, Alterra Energy announced that Neste, the world's leading provider of renewable diesel and sustainable aviation fuel, and an expert in delivering drop-in renewable and circular chemical solutions, acquired a minority stake in the company.

Alterra Energy, which has developed and commercialized a continuous advanced recycling technology that transforms end-of-life plastics into petrochemical feedstock, will process the Ravago-supplied waste plastic into ISCC PLUS certified material. Alterra will then market this material for further refining and conversion into circular building blocks for the plastics and chemicals producing industry.

Meanwhile in other news, US materials firm Trinseo has formed an agreement with SK AA Holdings, an affiliate of Falcon Private Holdings, to buy Aristech Surfaces, a North American manufacturer and global provider of polymethyl methacrylates (PMMA) continuous cast and solid surface sheets, serving the wellness, architectural, transportation and industrial markets. The purchase price is US$445 million.

Trinseo’s reach in North America, Europe and Asia is expected to lead to the transaction generating annual pretax cost synergies to the tune of roughly US$10 million by 2024 and additional revenue synergies. It also aims to accelerate growth and deliver meaningful value to shareholders.

The transaction is expected to be financed with cash on hand and existing credit facilities.

Trinseo noted that the acquisition of Aristech enables it to provide a full offering of PMMA technologies and innovative products serving customers in new, high-growth markets. The buyout is an important step toward its goal of becoming a global specialty materials and sustainable solutions provider. The buyout reinforces Trinseo’s position in acrylic solutions.

Aristech is a producer of continuous cast acrylic sheet for the wellness, architectural, transportation and industrial markets. Aristech’s products are used for a variety of applications, including the construction of hot tubs, swim spas, counter tops, signage, bath products and recreational vehicles. Aristech’s high margin profile and strong cash flow conversion is expected to drive long-term value for shareholders, Trinseo adds. The business will become part of Trinseo’s Engineered Materials segment.

The transaction is expected to be funded with cash on hand and existing credit facilities. Trinseo expects its net leverage ratio to be in the low-2x range at the end of the year, including proforma adjustments for the Synthetic Rubber divestiture and the Aristech and Arkema PMMA acquisitions. Trinseo anticipates the transaction will close by year-end 2021 subject to customary closing conditions and regulatory approvals.

(PRA)

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