Wellman, Inc. has entered into a letter of intent to sell its Engineering Resins business and other assets at its Johnsonville, SC site to JHW Greentree Capital, an affiliate of J.H. Whitney & Co., GarMark Partners and Westwind Equity Partners.
The deal is expected to close shortly after the completion of a definitive agreement and due diligence, and after the receipt of bankruptcy court approval. The investor group has already made a significant commitment to recycled PET through their investment in New Horizon Plastics Recycling, which is one of the largest producers of recycled PET serving the bottling and other industries.
Robert Fotsch, CEO of New Horizons, who would become CEO of the Wellman-Johnsonville assets, said: "For decades, Wellman's Johnsonville facility has been a leader in plastic recycling. Assuming we are able to complete the transaction, we plan to make the necessary investments and to support the high quality team in Johnsonville in order to reestablish Johnsonville's leadership in both engineering resins and recycled PET so that it remains a critical partner to companies in the automotive, bottling and other industries. Given the high cost of oil, the products produced at Wellman's Johnsonville's facility are a very attractive alternative to high priced virgin plastics."
Robert Taylor, VP of Engineering Resins, said "This is a fantastic opportunity for our Engineering Resins business, our employees, customers and the surrounding community. With the financial backing and commitment of our new partners, we expect to have the resources to expand our Engineering Resins operation and restart the PET bottle recycling operation. It is also a great feeling to work with this investor group to save jobs at the Johnsonville site."
The Engineering Resins business that is being acquireds have the capacity to produce more than 70 million pounds per year of engineered plastics, which is used in a wide variety of applications including automotive, lawn and garden, and electronics. Other assets include a 235 million pound polyester staple fiber plant and a 190 million pound PET bottle recycling operation, which will be used mainly in the bottling industry, but has applications for other areas.