Hexpol buys Preferred Compounding for $232 million

On 1 July Hexpol announced that it has acquired Preferred Compounding from the Audax Group, a US-based Private Equity firm. Preferred Compounding is described as an “advanced rubber compounder in North America”. Key markets include general industry, automotive, power and infrastructure. Hexpol paid approximately US$232 million on a cash and debt free basis. Preferred’s 208 turnover worked out as roughly US$240 million. The firm has around 540 employees in six facilities, five in the US and one in Mexico. The business will be consolidated from 1 July 2019.

According to the company, the latest acquisition is step forward in its acquisition growth strategy and “Preferred Compounding’s high performance elastomer capabilities further strengthens our offering which means a further step within high performance elastomers, following the acquisitions of the Mesgo Group and Kirkhill Rubber.”

Integration will start immediately, and possible restructuring and cost synergies will be evaluated and communicated separately at a later stage.

“Preferred Compounding has a legacy of technical excellence with a product suite of over 7,500 compounds designed for the most critical applications. Further, approximately 70 per cent of the compounds are derived from proprietary or enhanced co-developments serviced by highly strategic relationships. This transaction immediately leverages our global supply chain and adds new capabilities, application knowhow and additional customer base to HEXPOL Compounding Americas as well as broadens and strengthens our presence”, Tracy Garrison, president Hexpol Compounding Americas commented.

“This acquisition will strengthen our global positions in advanced polymer compounds with improved supply chain, cutting-edge expertise in polymer materials and solid knowledge of applications. We would like to thank Ken Bloom, Preferred Compounding CEO for the development of a well-run organization. I wish him all the best as he continues to pursue other professional interests. Lastly and most importantly, this acquisition brings many new and very experienced people into our group. Welcome aboard!”, Mikael Fryklund, president and CEO Hexpol Group added.

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