A. Schulman buying specialty engineered plastics supplier Citadel
In a bid to expand its specialty plastics product portfolio, chemical maker A. Schulman Inc. is buying Citadel Plastics for US$800 million.
Chicago-based Citadel, a portfolio company of private-equity firms HGGC and Charlesbank Capital Partners, engineers specialty thermoset composites, which are used in industries including transportation, electrical and health care.
Citadel reported about US$525 million in pro-forma revenue last year and has more than 2,000 products. Established in 2007, Citadel has 1,200 employees and operates 21 manufacturing facilities throughout the world, including 10 thermoplastic facilities in Canada and the U.S.
“Their product offering not only enhances our existing portfolio, but presents attractive expansion opportunities in other fast-growing sectors such as aerospace, medical, LED lighting and oil and gas,” said A. Schulman president and CEO Bernard Rzepka.
The transaction is expected to add to earnings in the first 12 months of ownership, and could contribute as much as US$25 million within 18 months, Rzepka said, due mostly to sourcing and plant efficiency actions. The deal is expected to close in the third quarter of A. Schulman’s fiscal 2015.
Acquisitions are becoming a key strategy for Akron, Ohio-based A. Schulman. In the past five years, the company has completed 10 acquisitions and three joint ventures, which contributed 30 per cent of its sales last year.