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Here's Why Shares Of Kraton Performance Polymers Gained 10%

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Shares of Kraton Performance Polymers Inc (NYSE: KRA), a producer of styrenic block copolymers and other engineered polymers, surged higher by more than 8 percent after the company entered into an agreement with PolyOne Corporation (NYSE: POL) to sell certain assets and supply materials.

As part of the agreement, Kraton sold assets related to its compounding business to PolyOne for $72 million in cash. In addition, Kraton and PolyOne entered into a long-term supply agreement win which Kraton has exclusive supply rights for polymers used in the divested business.

Kraton noted that the assets it sold represents less than 2 percent of its total consolidated revenue for fiscal 2014. The company added that it also expects to realize fixed cost savings from the asset sale.

Kraton will use the proceeds from the asset sale to reduce its outstanding debt.

"Over the years Kraton and PolyOne have enjoyed a significant relationship that has been based upon a mutual appreciation for the value of innovation," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer.

"This transaction will enable Kraton to focus on its core strengths around polymer design, and enable PolyOne to focus on its leading capabilities as a provider of polymer formulations. Ultimately, we expect the transaction to lead to additional growth opportunities for both companies," said Fogarty.

Posted-In: Kevin Fogarty kraton performance polymers polymers polyoneNews Contracts Intraday Update Movers

 

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