Compounder and distributor A. Schulman (Akron, Ohio / USA; www.aschulman.com) has announced it is acquiring custom polymer powders and film concentrates producer ICO (Houston, Texas / USA; www.icopolymers.com) in a cash and stock transaction valued at USD 191.4m. The companies said the deal comprised USD 105m in cash and 5.1m shares of A. Schulman common stock. After the merger closes in spring 2010, ICO shareholders will own approximately 16% of the combined company, they said. ICO, which provides specialty polymer services including size reduction and compounding, reported revenues of USD 300m for the year ending 30 September 2009.

Joseph Gingo, A. Schulman’s CEO, said the acquisition “presents us with an opportunity to expand our global presence substantially, especially in rotomoulding.” By acquiring the ICO operations, A. Schulman will increase its presence in the US masterbatch market, gain plants in the high-growth Brazilian market and facilities in Australia, and gain another facility in Asia, Gingo continued. “In Europe, the acquisition will allow us to expand our presence and add rotomoulding and size reduction to our capabilities,” he said. The deal will also enable A. Schulman to grow in countries where it has a limited presence, such as France, Italy and Holland, Gingo added.

ICO’s CEO, John Knapp, said the combined company will provide customers with enhanced product and service offerings. The ICO and A. Schulman businesses are largely complementary, with little overlap in end use and geographic markets, he remarked.

A. Schulman expects to achieve approximately USD 15m in run-rate synergies by the end of fiscal 2011, resulting from the consolidation and centralisation of global purchasing activities, tax benefits and the elimination of duplicate public company costs. For fiscal 2010, A. Schulman said it expects the acquisition to contribute approximately USD 150m to revenues and be accretive to earnings on an operating basis.