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Chemical company PolyOne Corp struck a $246.3 million deal to buy plastic products maker Spartech Corp to enter markets such as aerospace.
Spartech stockholders will receive $2.67 in cash and 0.3167 PolyOne shares for each share held, or $8 per share based on PolyOne's Tuesday close of $16.84. This represents a premium of 56 percent to Spartech's Tuesday close of $5.14 on the New York Stock Exchange.
The deal value is based on Spartech's 30.79 million shares outstanding as of September 1, according to Thomson Reuters data.
PolyOne expects the buyout to add to earnings in the first year, excluding acquisition-related costs and charges. The company said the deal will eventually add 50 cents to earnings per share.
The deal, expected to close in the first quarter of 2013, values Spartech at $393 million, including assumption of $142 million in debt, the companies said.
Spartech, which makes plastic sheet, specialty film laminates, specialty plastic alloys, color concentrates and blended resin compounds, has annual revenues of about $1.2 billion.
PolyOne will finance the deal with cash on hand and new long-term debt.
Bank of America Merrill Lynch, Moelis & Company and KeyBanc Capital Markets advised PolyOne on the deal, while Barclays and K&L Gates were Spartech's advisers.
PolyOne posted a better-than-expected profit for the third time this year, helped by an improved product mix.
The company also raised its share repurchase authorization to 20 million shares.
More information: www.polyone.com