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Chemical industry weekly news roundup, 22 August
1:00 PM MDT | August 22, 2014 | By LINDSAY FROST
This Week in CW:
Coatings maker Axalta has filed with the US Securities and Exchange Commission (SEC; Washington) for an initial public offering (IPO) of an undetermined value, according to regulatory filings. The filing, which consists of a preliminary prospectus, did not specify the timing of a potential IPO, or the price or number of shares in the offering. Axalta says it will use and any proceeds from an IPO to pay down debt, and the company itself will not receive any proceeds from a deal. Axalta is owned by private equity firm the Carlyle Group (Washington), which has a 99.5% stake in the company. Carlyle purchased Axalta, the former automotive coatings business of DuPont, for $4.9 billion in 2012.
Reliance Industries (Mumbai) told the Bombay Stock Exchange today that it will source 1.5 million m.t./year of ethane from the United States to feed its crackers in India. The company has executed storage and capacity agreements for liquefaction and export of ethane with a North American terminal, which is expected to begin operating in the second half of 2016. "The shale gas industry in North America has grown exponentially in the past five years. As a result, ethane has become the dominant feedstock for crackers replacing liquids. Reliance's investments in shale gas and its existing crackers portfolio in India are a natural fit for sourcing ethane from North America and shipping it to India to attain long-term feedstock competitiveness," the company says in the statement. Reliance will upgrade the crackers to maximize the cracking of ethane. Doing so will top out operational flexibility and capability to optimize feedstocks with complete control of the supply chain, the company says.
Mexichem (Tlanelpantla, Mexico) has reached an agreement to acquire Dura-Line (Knoxville, TN) from private equity firm CHS Capital (Chicago) for $630 millon in cash and assumed liabilities, Mexichem announced on Monday. The transaction is subject to approval by the relevant authorities and is expected to be completed in the fourth quarter, at which time Mexichem will include Dura-Line in Mexichem's integral solutions business line. Dura-Line specializes in high-density polyethylene (HDPE) conduit, duct, and pressure-pipe products for the telecom and data communications, energy, and infrastructure industries. The company has manufacturing facilities in the United States, Mexico, India, Oman, Europe, and South Africa. Dura-Line will continue to operate with its existing management and its existing portfolio of brands.
Siluria Technologies (San Francisco) announced on Wednesday that Saudi Aramco's venture investment subsidiary has become an equity investor in Siluria, a pioneer in commercial production of fuels and chemicals from natural gas. Siluria has announced the initial close of its D-series financing round, which was led by the venture subsidiary and included additional investments by all of the major existing investors in Siluria. The financing round has raised $30 million. Saudi Aramco, the world's leading fully integrated energy and chemical enterprise, is looking at the potential of using Siluria's technology, Siluria tells CW. A feasibility study is under way, but there are no specifics at this stage. "The initial phase would likely be with the chemical operations," Siluria says.
Around the Web:
Venture investors and the public markets are increasingly out of sync, according to a blog in the Wall Street Journal. Private financing rounds that valued US venture-backed companies at $1 billion or more were four times as common through the first half of this year as initial public offerings where market capitalizations reached that threshold, according to a VentureWire analysis. It is the widest gap on record between venture rounds and IPOs for billion-dollar companies. More deals were done at $1 billion-plus valuations in the first half of this year than in any other full year on record.
New construction starts in July climbed 6% to a seasonally adjusted annual rate of $588.8 billion, according to McGraw Hill Construction, a division of McGraw Hill Financial—covered in Financial Buzz. Nonresidential building continued to advance, supported by yet another robust month for manufacturing plant projects as well as improvement for commercial building. The nonbuilding construction sector (public works and electric utilities) also advanced, helped by the start of a very large mass transit rail project. At the same time, residential building was unchanged from its pace in June. For the first seven months of 2014, total construction starts on an unadjusted basis were reported at $311.6 billion, a 4% gain compared to the same period a year ago.
Median household income has been on the rise for the past three years, climbing 3.8% to $53,891 in June, according to newly released data by Sentier Research, written about in CNN Money. It's yet another indication that the economic recovery is taking hold. But Americans have yet to fully heal from the Great Recession, which officially ended five years ago. Median income remains 3.1% below its June 2009 level of $55,589. That's in large part because unemployment remained high in the early years of the recovery, according to Sentier.