Trinseo SA, the plastics maker owned by The Dow Chemical Co. (DOW) and Bain Capital LLC has announced that it has filed for an initial public offering to raise up to $400 million for repaying loans and other corporate purposes.
Trinseo was previously known as Styron Corp and was owned by Dow Chemical before being bought by Bain Capital for $1.63 billion in 2010. Dow Chemical still has a 7.5% stake in the company while Bain owns about 92% of Trinseo.
As per Trinseo, the proceeds from the IPO will be used to repay debt and pay fees to Bain Capital. The company plans to list its ordinary shares under the symbol “TSE”.
The company makes latex, synthetic rubber and other kinds of plastics for many industries, including makers of tires, paper and packaging, consumer electronics and carpets.
In the first three months of the year, Trinseo posted a net loss of $9.3 million on revenue of $1.54 billion. A year ago, as part of Dow Chemical, the division had net income of $48.7 million on revenue of $1.07 billion.
Dow supplies high-performance materials, agricultural products, plastics (polyethylene and polypropylene) and industrial chemicals to industries and consumers globally. The company’s products have a vast array of applications and are used by various industries including farming, construction, transportation, electronics and consumer goods.
Recently, Dow reported its first quarter of 2011 results. The company earned $0.82 per share in the first quarter of 2011, ahead of the Zacks Consensus Estimate of $0.67 per share as well as last year’s $0.43 per share. However, including one-time charges, the company earned $0.54 per share compared with $0.41 per share in the year-ago quarter.
Quarterly revenues jumped 20% year over year to $14.7 billion and were above the Zacks Consensus Estimate of $13.8 billion. Volume and pricing gains across all business segments and geographical regions, particularly North America and Europe, yielded healthy revenue growth.
Dow anticipates that demand would improve further, especially in Asia with the global economic recovery. The US and European markets have also started showing signs of improvement. Dow is also optimistic about major consumer-markets, including electronics, coatings, automotive and packaging. However, construction markets are expected to remain weak.
DOW faces stiff competition from EI DuPont de Nemours & Co. (DD).
Currently, Dow has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long- term Neutral recommendation.
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