March 27 2016, David R Brown
WL Ross Holding buys a 65% stake in Nexeo Solutions from TPG for USD 1.65 billion
WL Ross Holdings Corp. (NASDAQ: WLRH), an acquisition company run by billionaire investor Wilbur Ross, is to acquire Nexeo Solutions Holdings, a leading global distributor of chemicals and plastics from TPG, a leading global private equity firm. As part of the transaction, TPG will roll over a substantial portion of its existing equity and retain approximately 35 percent ownership. The anticipated initial enterprise value, including fees and expenses, is USD 1,669 million, implying a multiple of 8.4x the Company's estimated adjusted EBITDA for the calendar year ending December 31, 2016.
We believe Nexeo Solutions is an ideal platform to further roll up the fragmented chemicals and plastics distribution space, creating significant value for shareholders
Wilbur L. Ross, Jr.
Chairman of WLRH
Upon completion of the transaction, WLRH will change its name to Nexeo Solutions, Inc., and will apply to continue to trade on The NASDAQ Capital Market under the ticker symbols NXEO, NXEOU, and NXEOW. TPG will continue to be represented on the board of directors of Nexeo Solutions. In addition, the board of directors will consist of members of the existing board of directors of Nexeo Solutions as well as other qualified individuals; Wilbur L. Ross, Jr. will serve as Chairman. The current Nexeo Solutions management team, headed by David Bradley, is expected to continue to lead Nexeo Solutions, Inc. following the consummation of the merger.
Wilbur L. Ross, Jr., Chairman of WLRH, said, “We are pleased to partner with TPG to introduce Nexeo Solutions as a publicly listed company. Over the last two years, we have evaluated a number of potential acquisitions for WLRH and we believe this opportunity offers a superior option for our shareholders. Nexeo Solutions presents a unique opportunity to invest in an industry-leading company supported by strong business fundamentals and long-term structural growth trends. Additionally, we believe the Company is an ideal platform to further roll up the fragmented chemicals and plastics distribution space, creating significant value for shareholders. We look forward to our partnership with the Nexeo Solutions management team as we work with them to further capitalize on these attractive growth prospects.”
“This transaction allows us to align our ownership structure in a way that accelerates our progress towards defining distribution," said David Bradley, President and CEO of Nexeo Solutions. "With a strong, centralized operating platform and access to multiple sources of capital, I believe we will be positioned to grow organically and through acquisition.”
About Nexeo Solutions
Nexeo Solutions, based in Houston, TX, is the No.1 plastics distributor and No. 3 chemicals distributor by revenue in North America supplying products used across a broad section of manufacturing industries including household products, industrial and institutional, automotive, lubricants, pharmaceuticals, personal care, coatings and construction. The Company generated revenues of USD 3.9 billion in the fiscal year ended September 30, 2015 and employs approximately 2,450 employees and connects a network of over 1,300 suppliers with a diverse base of more than 27,500 customers in North America, EMEA, and Asia.
Source(s): Nexeo Solutions Press Release