Over the next several months, the company will close six manufacturing plants and relocate production to other PolyOne facilities. These actions are expected to be completed by the end of 2014 and generate annualized pre-tax savings of approximately $25 million in 2015. Cash costs are expected to approximate $45 million over the next 12-18 months, primarily related to severance, asset relocation and additional capital investment.
"These actions are entirely consistent with our previously announced plans to integrate PolyOne and Spartech and to accelerate our specialty transformation," said Stephen D. Newlin, chairman, president and CEO. "By combining our resources, we expect to better serve our customers with a more competitive cost structure, improved product quality and on-time delivery with increasingly innovative technologies."
Production at the closing North American facilities will be shifted to other PolyOne locations, and these actions are expected to result in a net reduction of approximately 250 employees.
"Our exceptional management team has the experience and proven track record of transforming and integrating businesses with specialty potential through the execution of our four-pillar strategy," Mr. Newlin added. "We are committed to delivering at least $65 million of synergies from the Spartech acquisition and $0.50 of EPS accretion upon full synergy capture."
"While the business case for these actions was clear, we understand the impact this announcement will have on affected employees, their families and local communities, and we will handle these moves with great sensitivity and dignity for everyone affected," Mr. Newlin said.
PolyOne expects to recognize estimated charges of $35 million related to this realignment over the next 12-18 months. This includes approximately $20 million in cash charges, primarily associated with severance and asset relocation costs, and approximately $15 million in non-cash charges, primarily associated with accelerated depreciation of exited facilities and equipment.
PolyOne Corporation, with 2012 revenues of $2.9 billion, is a premier provider of specialized polymer materials, services and solutions. The company is dedicated to serving customers in diverse industries around the globe, by creating value through collaboration, innovation and an unwavering commitment to excellence. Guided by its Core Values, Sustainability Promise and No Surprises PledgeSM, PolyOne is committed to its customers, employees, communities and shareholders through ethical, sustainable and fiscally responsible principles.
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