March 21, 2016 / 11:08 AM / a year ago

UPDATE 2-WL Ross to buy chemicals distributor Nexeo from TPG

2 Min Read

* Deal for $1.3 bln in cash and debt; up to 35 mln WL Ross shares

* TPG to retain about 35 pct stake in Nexeo

* WL Ross to change name to Nexeo Solutions Inc (Adds details, background)

March 21 (Reuters) - WL Ross Holdings Corp said on Monday it would buy chemicals and plastics distributor Nexeo Solutions Holdings LLC from private equity firm TPG in a deal valued at $1.67 billion.

TPG, which purchased Nexeo for nearly $1 billion from U.S. specialty-chemicals producer Ashland Inc in 2011, will retain about 35 percent stake in the company and will continue to have representation on the board.

Texas-based Nexeo supplies raw materials used in a number of industries including chemical manufacturing, oil and gas and healthcare.

WL Ross - a blank-check company formed by billionaire investor Wilbur Ross for acquisitions - will be renamed Nexeo Solutions Inc when the deal closes, expected in the second quarter.

Nexeo is "an ideal platform to further roll up the fragmented chemicals and plastics distribution space," Wilbur Ross said in a statement.

There have been a spate of deals in the North American chemical industry in the past few years, topped by the $130-billion merger between chemical titans DuPont and Dow Chemical Co.

The Nexeo deal consists of $1.3 billion in cash and debt, and up to 35 million shares of WL Ross common stock.

WL Ross said it had secured debt facilities to fund the cash portion.

The company, which will be led by Nexeo Chief Executive David Bradley, said it would apply to trade on the Nasdaq under the ticker symbols NXEO, NXEOU, and NXEOW.

Wilbur Ross will serve as chairman.

Nexeo has more than 2,400 employees in North America, Europe and Asia and generated nearly $4 billion in annual sales in its fiscal year ended September 2015.

Lazard, Deutsche Bank Securities Inc, Credit Suisse and Bank of America Merrill Lynch advised WL Ross. Jefferies LLC was Nexeo's financial adviser. (Reporting by Amrutha Gayathri and Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila)

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