Wilbur Ross Blank-Check Company to Buy Nexeo Solutions
March 20 2016 - 9:30PM
Dow Jones News
A blank-check company run by billionaire investor Wilbur Ross
has reached a deal to buy Nexeo Solutions Holdings LLC, a
distributor of plastic resins and chemicals, for roughly $1.6
billion, including debt, according to people familiar with the
matter.
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. The deal is
expected to be announced Monday morning, the people said.
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, the people said. 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 will fund the
rest of the purchase with debt, the people said. TPG will roll over
some of its equity into the new public company, one of the people
said.
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 20, 2016 21:15 ET (01:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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