Business Diversification in Polymer Compounding

Challenge

A major polymer compounder was interested in diversifying its product portfolio as part of its overall growth initiatives.

Approach

Principia was engaged to model various participation options in the broader polymer compounding industry, and assessed the enterprise value created through acquisition of one or more targets. A specific target surfaced from this process, and Principia assisted on the market diligence to support the deal.

Principia helped to define the market space held by the target, address business fundamentals on a global basis, review the competitive landscape for major competitors by product and market, and determine the operating efficiencies that could be gained through the Client's operations.

Outcome

Client acquired the target, thus reducing its reliance on its legacy business and more than doubled its revenues with a more diverse range of product businesses. Based on merger synergies, the client saved more than $15 million in annual operating costs and became one of the largest global compounders with revenues in excess of $2 billion.

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