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PQ Group to sell microspheres unit to private equity, explore options for sodium silicates

October 22/2020

MOSCOW (MRC) -- PQ Group announced plans to sell its performance materials business, a producers of glass microspheres for transportation safety and electronics applications, to private equity firm The Jordan Company (New York, New York) for USD6550 million, said Chemweek.

The performance materials business generated USD363.0 million in revenue and USD76.7 million in adjusted EBITDA during 2019.

The company has also announced plans to explore strategic alternatives, including a possible sale, for its sodium silicate and silicate derivatives unit, called performance chemicals. That unit, PQs largest reporting segment, generated USD685.1 million in revenue and USD154.3 million in adjusted EBITDA in 2019. It operates in diversified end markets, including food and beverage, coatings and personal care.

The plans are both part of a strategy to focus PQ on its catalysts and refining services businesses, which are well positioned to use its technology and service offerings to help customers drive sustainability by more efficiently producing the lightweight polymers and clean fuels that are expected be in high demand going forward, says PQ Group CEO Belgacem Chariag. The performance chemicals and performance materials segments account for over 60% of PQ Groups annual revenues.

The performance materials sale is expected to close by the end of this year. Proceeds from the sale will go towards reducing debt and funding a special dividend of up to USD1.84/share. Goldman Sachs and Harris Williams are acting as financial advisors to PQ, while Ropes & Gray is acting as legal advisor. Kirkland & Ellis is acting as legal advisor to The Jordan Company. No timetable has been given for the potential sale of the performance chemicals segment.

As MRC informed earlier, in last December, PQ Group Holdings Inc. announced an agreement with INEOS Polyolefin Catalysts to commercialize certain polyethylene catalysts to customers of selected processes.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, PP, PE, ethylene, propylene, petrochemistry.
Category:General News
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