Audax Deals ColorMatrix To PolyOne

Target: ColorMatrix

Price: $486 million

Buyer: PolyOne Corp.

Seller: Audax Group

Financial Adviser: The Valence Group

Chemical company PolyOne Corp. struck a deal to buy ColorMatrix from private equity investor Audax Group for $486 million, picking up a leading manufacturer of colorants and other additives for plastics, sister news service Reuters reported.

Publicly traded PolyOne said that after the deal closes, more than half of its operating income will come from its specialty chemicals businesses, as opposed to just 2 percent in 2005. The deal should add 2 to 3 cents to earnings per share next year, PolyOne said in a statement, and 10 to 12 cent per share in 2013. ColorMatrix had sales and EBITDA of around $196.8 million and $43.6 million, respectively, for the year ended June 30.

PolyOne plans to finance the purchase price of the deal by using cash on hand and around $300 million of long-term debt. It expects the deal to close later this year. Reuters previously reported that Audax had put ColorMatrix on the block in July, citing sources familiar with the matter.

The Valence Group advised PolyOne on the deal.

(Michael Erman is a correspondent for Reuters in New York.)