- Deal includes 35m shares, plus $1.3 billion in cash, debt
- Seller TPG plans to retain 35 percent holding in Nexeo
WL Ross Holding Corp., the investment vehicle run by billionaire Wilbur Ross, agreed to buy Nexeo Solutions Holdings for about $1.65 billion to use as a base for acquiring other assets in the fragmented chemical-distribution industry.
WL Ross will buy the business from TPG Capital with as many as 35 million of its shares plus $1.3 billion in cash and debt, the companies said in a statement Monday. That value assumes WL Ross’s shares are worth $10 each, the companies said.
Wilbur Ross said he evaluated a number of potential acquisitions, with Nexeo offering the best returns. Distributors including Brenntag AG of Germany are continually acquiring smaller competitors to add clients and broaden their offerings as manufacturers look to simplify their supply chains. Houston-based Nexeo is the top plastics and third-largest chemicals distributor by revenue in North America, according to the statement.
WL Ross Holding will change its name to Nexeo Solutions Inc. and TPG plans to retain a 35 percent holding. Nexeo’s management, including Chief Executive Officer David Bradley, will lead the combined company.
The deal is the largest for WL Ross since the company was founded in 1997, according to data compiled by Bloomberg. The transaction takes place in the midst of a broader shift within the U.S. chemical industry, which culminated in the proposed $66 billion merger between Dow Chemical and DuPont at the end of last year.
WL Ross had drawn $11.6 billion capital in total and invested in 166 companies in 14 different industries as of June 30, 2015, the company states on its website.
The deal was unanimously approved by Nexeo and WL Ross’s boards and is expected to close in the second quarter, the companies said.