First Pacific Advisors (Trades, Portfolio) purchased a 24,803,969-share stake in Nexeo Solutions Inc. (NXEO, Financial) on June 8.
Nexeo Solutions began its business operations on April 11, 2011. It is a global leader in chemical and plastics distribution. Nexeo Solutions offers more than 23,000 products across North America, Europe, Asia and the Middle East from over 1,300 suppliers. Nexeo Solutions supplies raw materials used in a broad cross section of industries including chemical manufacturing, oil and gas, coatings, adhesives, paints, personal care, automotive and health care. It offers custom blending, packaging services, analytical and formulation services and customized environmental services to more than 27,500 customers worldwide. Nexeo Solutions employs approximately 2,450 employees globally.
According to Nexeo Solutions' company website, it has been gaining momentum and improving its financial statements; adjusted EBITDA of $41.4 million increased 15.3% from $35.9 million. Net income from continuing operations of $2 million was up from a net loss of $600,000 in the second quarter of 2015 although sales and operating revenue of $862.2 million decreased 9% from $1.01 billion.
Below is a chart of Nexeo Solutions' financial statements ending on March 31 taken from the company website.
On March 21, multibillionaire Wilbur Ross (Trades, Portfolio) announced that his blank cheque WL Ross Holding Corp. had plans to acquire a majority of Nexeo Solutions for approximately $1.6 billion, and he was going to take the private specialty chemical company public on the Nasdaq Capital Market. Global alternative asset firm TPG, the current majority owner of Nexeo, now owns approximately 35% of the new company.
On June 9, WL Ross Holding announced the successful completion of its acquisition of Nexeo Solutions Holdings LLC, and it began trading on the Nasdaq Capital Market under the ticker symbols NXEO, NXEOU and NXEOW starting June 10.
“We are proud to bring Nexeo Solutions to the public market and accelerate our growth towards market leadership,” said David Bradley, president and CEO of Nexeo Solutions. “By expanding our ownership structure with Wilbur Ross (Trades, Portfolio) Jr. and team, we are diligently positioning the platform for continued growth for our customers, suppliers and shareholders.”
Conclusion
Nexeo Solutions is a global leader in chemical and plastics distribution. It offers more than 23,000 products across North America, Europe, Asia and the Middle East from over 1,300 suppliers. It is possible that First Pacific Advisors (Trades, Portfolio) saw a tremendous opportunity and was heavily influenced by WL Ross Holding's first-quarter announcement of plans to purchase of Nexeo Solutions.
Cheers to your investment success.
Disclosure: Author does not own any shares of this company.
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