ASH Ashland Inc

A blank-check company run by billionaire investor Wilbur Ross agreed to buy Nexeo Solutions Holdings LLC, a distributor of plastic resins and chemicals, for roughly $1.6 billion, including debt.

Nexeo is currently owned by private-equity firm TPG, which purchased the company for nearly $1 billion from U.S. specialty-chemicals producer Ashland Inc. in 2011. News of the deal, announced Monday, was reported Sunday by The Wall Street Journal.

Nexeo, based in The Woodlands, Texas, supplies raw materials used in a number of industries including chemical manufacturing, oil and gas and health care. It has more than 2,400 employees in North America, Europe and Asia and generated nearly $4 billion in annual sales in its fiscal year ended September 2015.

Mr. Ross is buying the company through WL Ross Holding Corp., a blank-check company launched in 2014. Blank-check companies, also called special-purpose acquisition companies, or SPACs, use stock offerings to raise cash that they later use to spend on acquisitions.

WL Ross Holding will pay $500 million in cash and fund the rest of the purchase with debt, according to people familiar with the situation. TPG will roll over a substantial portion of its existing equity and retain approximately 35% ownership.

Nexeo Solutions will become a unit of WL Ross Holding. After the deal, WL Ross Holding will change its name to Nexeo Solutions Inc. and apply to continue to trade on Nasdaq under the ticker symbols NXEO, NXEOU, and NXEOW.

The Nexeo management team, headed by David Bradley, is expected to continue to lead the company following the deal's close, which the companies expect will occur by July. Mr. Ross will serve as chairman.

Mr. Ross's SPAC went public in June 2014 and had until June 2016 to buy assets with the proceeds of the stock offering. SPACs typically have about two years to spend offering proceeds or they have to return the cash to investors.

The market for SPACs has been a relatively busy corner of the slow market for initial public offerings so far this year. Even though just three SPACs have gone public in 2016, the largest IPO of the year, Silver Run Acquisition, was a SPAC that said it plans to buy oil and gas assets.

SPAC volume for all of 2015 was $3.9 billion, more than double the level from 2014, according to Dealogic. But it is still down from the SPAC peak in 2007, when it hit $12 billion in 66 offerings.

Investors had been watching Mr. Ross to see what he might purchase, as the market for bigger blank-check IPOs may be constrained somewhat until those launched in 2014 and 2015 make purchases.

Mr. Ross is one of a number of well-known financiers who have recently launched or took sizable stakes in SPACs. Others include William Ackman, the founder of hedge fund Pershing Square Capital Management LP, and Martin Franklin, the founder of consumer-goods company Jarden.

Write to Maureen Farrell at maureen.farrell@wsj.com

(END) Dow Jones Newswires

March 21, 2016 08:35 ET (12:35 GMT)

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