Houston distributor delisted after takeover

Nexeo Solutions, based in The Woodlands, has been delisted after its $1.75 billion takeover by Univar. The deal was originally announced in September 2018.

Nexeo is a chemicals and plastics distributor that provides value-added services such as blending, re-packaging and testing. Univar is primarily interested in the chemicals business. Earlier in February the two companies announced they would sell the plastics division for $640 million to a private equity firm.

Nexeo was originally formed as a private equity carve-out of the distribution business of Ashland in 2011. The deal price was $979 million. In March 2016, Nexeo went public via a reverse takeover by a blank check company, WL Ross Holdings (aka Wilbur Ross). The value of the deal was $1.67 billion.

Univar paid cash of $275 million and issued stock worth $605 million to the stockholders of Nexeo. It also repaid Nexeo’s debt of $745 million. The balance (estimated at $109 million) is primarily due to the former owners and officers of Nexeo as part of the reverse takeover.

Nexeo put itself up for sale at the beginning of 2018 due to the competitive landscape of the industry and the complex capital structure that resulted from the reverse takeover.

The top 5 officers of Nexeo will be receiving golden parachute payments totaling $35 million. In addition 4 of the 5 were part of the TPG deal and will be receiving a further $1.4 million of deferred consideration.

Univar expects to incur one time integration costs of $150 million. Approximately a third of this will be spent on IT integration costs of Univar’s e-commerce capabilities with Nexeo’s ERP system.  The rest will come from consolidating back office functions and overlapping facilities.

SEC filing

 

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