M&As: SI Group sells majority of industrial resins business; DSM to sell stake in AOC to Lone Star Funds

Additives company SI Group plans to complete an agreement to sell the majority of its global Industrial Resins business to ASK Chemicals, a portfolio company of private equity firm, Rhône Group. Terms were not disclosed

The transaction includes SI Group’s Industrial Resins products and associated manufacturing sites in Rio Claro, Brazil; Ranjangaon, India; and Johannesburg, South Africa, as well as licensed technology and multiple tolling agreements globally. ASK Chemicals, headquartered in Hilden, Germany, is a market leader in the foundry materials sector and manufactures binders, coatings, feeders, filters, and release agents, as well as metallurgical products including inoculants, inoculation wires, and master alloys for iron casting.

“We remain confident this is the right strategic move for our employees and our business. ASK Chemicals has proven industry expertise that will add significant value and continuously enhance these businesses,” said David Bradley, President/CEO of SI Group. “The deal also allows us to focus more intentionally on building and growing our portfolio as a performance additives powerhouse.”

SI Group will carve out related businesses at these sites, including the manufacture of rubber & adhesives, oilfield, and surfactants, as well as foundry products in Brazil, and will operate tolling agreements with ASK. The company will also retain the industrial resins businesses in the US and China.

Meanwhile, in other news, Dutch chemical firmDSM says it has informed its stakeholders that its partner CVC Capital Partners has proposed the sale of AOC, in which DSM is a minority shareholder, to an affiliate of Lone Star Funds.

DSM owns a minority position in AOC through the contribution of its composite resins business in 2015. It is estimated that DSM will receive about EUR300 million in cash for its entire shareholding following the closing of the transaction. Closure is subject to the customary conditions and approvals.

DSM and CVC, one of the world’s leading investment advisory firms, tied up for a partnership for DSM’s activities in Polymer Intermediates (Caprolactam and Acrylonitrile) and Composite Resins through the formation of a new company, ChemicaInvest B.V in 2015.

DSM contributed its global caprolactam business (Europe, North America, its 60% stake in DNCC (China) and the caprolactam licensing business), acrylonitrile business and composite resins business including its 75% stake in JDR (China). DSM’s 65% stake in the service organisation Sitech Services held via its caprolactam and acrylonitrile businesses was also transferred. ChemicaInvest operates as an independent company with three business units: caprolactam, acrylonitrile and composite resins.

(PRA)

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