By Frank Esposito
SENIOR STAFF REPORTER
Published: May 28, 2014 10:34 am ET
Updated: May 28, 2014 10:39 am ET
Image By: Westlake Chemical
Albert Chao
Westlake Chemical Corp. has found a use for its growing pile of cash, acquiring German specialty PVC maker Vinnolit Holdings GmbH for 490 million euros (US$666.4 million).
Houston-based Westlake will finance the deal using existing cash and credit facilities, officials said in a May 28 news release. Westlake — a producer of polyethylene, PVC and related products — has benefited from increased U.S. natural gas production. The firm’s 2013 profit grew almost 60 percent to more than $610 million, playing a role in a 2-for-1 stock split on March 18.
Westlake is acquiring Ismaning, Germany-based Vinnolit from private equity firm Advent International of Boston. The deal includes five production plants in Germany (Gendorf, Burghausen, Cologne, Knapsack and Schkopau) and one in the United Kingdom (Hillhouse). These plants have total annual capacity of 1.7 billion pounds of PVC, 1.4 billion pounds of vinyl chloride monomer feedstock and 1 billion pounds of caustic soda.
The acquisition also includes an R&D center in Gendorf and an applications lab in Burghausen.
Vinnolit employs 1,400 and posted sales of 917 million euros (US$1.25 billion) in 2013. The firm’s products are used in a wide range of industrial and building product applications, including automotive sealants, pipe, rigid film, medical applications, flooring, wall coverings and window profiles.
The acquisition “is an excellent strategic fit for Westlake,” President and CEO Albert Chao said in the release. “It will allow us to expand our chlorovinyl business globally and adds important specialty PVC products and technology to our existing portfolio.”
Vinnolit managing director Josef Ertl said that the firm’s management board “has transformed Vinnolit into the leading specialty PVC manufacturer, and remain dedicated to further growing the company’s business.”
The acquisition would increase Westlake’s $3.8 billion annual sales total by about one-third. Initial Wall Street reaction to the deal was positive, sending Westlake’s per-share stock price up more than 3 percent to $79.30 in early trading May 28. | 
