Buyout Firm Molds Deals for European Plastic

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The folks at Century City buyout shop OpenGate Capital think Europe’s automotive and homebuilding industries are primed for recovery, so they’ve lately been investing in manufacturers of plastics that go into cars and houses there, announcing three deals in the European plastics market last year.

The latest announcement, which came just a few days before Christmas, was that OpenGate will enter a partnership with European plastics investor Alain de Krassny to buy bankrupt French firm Kem One SAS of Lyon. OpenGate and de Krassny bid separately on the company before teaming up. A French court approved the joint proposal Dec. 20. OpenGate and de Krassny will have equal stakes in the company.

Kem One is Europe’s second largest maker of polyvinyl chloride resin, or PVC, which is used by manufacturers of plastic products. The company was spun out of another French firm, Arkema, in 2012 and acquired by Geneva conglomerate Klesch Group. Klesch held on to Kem One for less than a year before filing for bankruptcy and claiming Arkema had provided false information.

Sebastien Kiekert Le Moult, a partner at OpenGate, said he couldn’t speculate about the dispute between Klesch and Arkema, but said that Kem One had been mismanaged for years and was saddled with costly contracts when it was carved out of Arkema.

“The bankruptcy was a direct consequence of the terms of the carve-out,” he said. “Kem One had inherited supply agreements and a cost structure that made it very challenging for the business to survive.”

The company’s troubles made it attractive for OpenGate, he said, in part because of the opportunity to renegotiate contracts through the bankruptcy process.

With annual revenue of about $1.1 billion, Kem One is the biggest company OpenGate has acquired since the buyout firm was founded in 2005. The rest of its 13 portfolio companies have combined revenue of about $2 billion.

Kem One is also the latest in a string of OpenGate investments in the European plastics market. The firm last month announced it had reached an agreement to purchase Benvic, a specialty plastics manufacturer with operations in France, Italy and Spain. In February, OpenGate acquired plastic door- and window-frame maker Profialis of Paris. There are no immediate plans to combine any of the businesses.

Le Moult said Europe’s automotive and homebuilding industries, both of which use lots of plastics, are beginning to recover from the recession, making for good timing on the acquisition.

“We see the PVC market as an opportunity to invest at a relatively low point of the cycle,” he said.

New Digs

Two local banks each added a third branch last month in new territories for both.

Downtown L.A. lender Pacific Commerce Bank last week opened a branch in Del Mar Heights, just north of San Diego. The branch, Pacific Commerce’s third after its Little Tokyo headquarters and one on the Westside, opened on New Year’s Eve.

Meanwhile, Glendale’s Americas United Bank is buying a branch from another bank. Last week, it announced the purchase of the Lancaster branch of San Diego’s Silvergate Bank in a deal expected to close in the next few months.

The branch would be the third for Americas United, after its headquarters and Downey outpost, and would represent big growth for the bank. In acquiring the Silvergate branch, Americas United will take on $45.7 million in deposits, a figure that would boost the bank’s total deposits to nearly $154 million from $108 million, a 43 percent jump.

All those deposits made the branch an attractive buy, said Adriana Boeka, Americas United’s chief executive.

“I’ve been looking at opportunities for the last year and a half and they don’t usually come in this significant size,” she said. “It’s a wonderful opportunity.”

Americas United will pay a premium of a half-percent for the branch’s deposits, or about $229,000. It will not acquire any of Silvergate’s loans. The branch was Silvergate’s only site outside of San Diego County.


Farewell Wilshire

Two longtime board members of Koreatown lender Wilshire Bancorp Inc. resigned last week and will be replaced by newly elected members.

Kyu-Hyun Kim and Young Hi Pak, both of whom had been on bank’s board since 1994, resigned effective Dec. 31. Kim, 78, and Pak, 64, were nominated for re-election to the board earlier this year.

In a Securities and Exchange Commission filing announcing the resignations, Wilshire said the board members had resigned for personal reasons. Kim and Pak could not be reached for comment.

They will be replaced by Steven Didion, a Northern California investment manager, and Daisy Ha, a downtown L.A. attorney, who were elected to the board Dec. 30.


Staff reporter James Rufus Koren can be reached at [email protected] or (323) 549-5225, ext. 225.