Sun European Partners acquired ELIX Polymers as part of a corporate carve-out in April 2012. ELIX supplies ABS polymers and products used in the manufacture of consumer goods, consumer electronics, medical devices and automotive dashboards. Those products are sold to over 300 customers in more than 40 countries.
Since the original investment, Sun European Partners has transformed the company from a production-focused division of a large conglomerate, into a standalone business focused on earnings.
In particular, the firm has driven earnings improvement by introducing continuous improvement in manufacturing operations, supply chain and procurement. It has also implemented a business intelligence system to create transparency on profitability drivers, which has led to better pricing and improved production efficiency, as well as supported the company’s expansion into North America in 2016. As a result, ELIX more than quadrupled EBITDA from €5.8 million at acquisition to €25.1 million for the 12 months to June 2018.
“At the core of this transformation was the company’s motivation to deliver on its ESG targets and reduce its energy consumption, waste and carbon footprint”
Sun European Partners
In addition, Sun European Partners has worked hard, in partnership with ELIX, to strengthen its ESG credentials as the plastics industry faces ongoing challenges around environmental impact. The company has reduced its energy consumption by 11.4 percent; its greenhouse gas emissions by 10.26 percent; reduced the waste generated per tonne manufactured by 4.4 percent and increased R&D spending on sustainable products by 10.7 percent.
Furthermore, ELIX recently conducted a comprehensive study to analyse environmental risks in its facilities, which resulted in definitive action to achieve its future sustainability objectives. Sun European Partners itself named ELIX its own ESG Excellence winner in 2018.
“ELIX was previously a manufacturing unit of a large conglomerate. During Sun’s ownership, we worked with the management team to transform the business into a successful standalone company,” says Tim Stubbs, senior managing director at Sun European Partners.
“At the core of this transformation was the company’s motivation to deliver on its ESG targets and reduce its energy consumption, waste and carbon footprint. Leveraging the Sun transformation system, key operational changes included the introduction of lean manufacturing and commercial excellence.”
Following a six-year holding period, ELIX was acquired by Chinese strategic buyer Sinochem International for €195 million, representing an acquisition multiple of 7.8x EBITDA. The sale generated a gross return of 8.4x total invested capital for Sun European Partners and an internal rate of return of 54 percent.
“Maintaining high ESG standards resulted in a considerable jump in productivity, record levels of customer satisfaction and strong sales increases, leading to a quadrupling in EBITDA and ultimately to ELIX becoming a European standalone leader in its field,” says Stubbs.
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