Houston, US-based Westlake will finance the deal using existing cash and credit facilities, officials said in a 28 May news release. Westlake — a producer of polyethylene, PVC and related products — has benefited from increased US natural gas production. The firm’s 2013 profit grew almost 60% to more than $610m (€449m), playing a role in a 2-for-1 stock split on 18 March.

 

Westlake is acquiring Ismaning, Germany-based Vinnolit from private equity firm Advent International of Boston. The deal includes five production plants in Germany (Gendorf, Burghausen, Cologne, Knapsack and Schkopau) and one in the United Kingdom (Hillhouse). These plants have total annual capacity of 1.7 billion pounds (771m kg) of PVC, 1.4 billion pounds (634m kg) of vinyl chloride monomer feedstock and 1 billion pounds (454m kg) of caustic soda.

 

The acquisition also includes an R&D center in Gendorf and an applications lab in Burghausen.

 

Vinnolit employs 1,400 and posted sales of €917m in 2013. The firm’s products are used in a wide range of industrial and building product applications, including automotive sealants, pipe, rigid film, medical applications, flooring, wall coverings and window profiles.

 

The acquisition “is an excellent strategic fit for Westlake,” President and CEO Albert Chao said in the release. “It will allow us to expand our chlorovinyl business globally and adds important specialty PVC products and technology to our existing portfolio.”

 

Vinnolit managing director Josef Ertl said that the firm’s management board “has transformed Vinnolit into the leading specialty PVC manufacturer, and remain dedicated to further growing the company’s business.”

 

The acquisition would increase Westlake’s $3.8bn (€2.8bn) annual sales total by about one-third. Initial Wall Street reaction to the deal was positive, sending Westlake’s per-share stock price up more than 3% to $79.30 (€58.3) in early trading 28 May.