James P. Rogers will continue to serve as chairman and CEO until January 1, 2014. He will then serve as executive chairman of the board. According to a statement from Eastman the transition is part of the board’s normal succession planning process.

“Being CEO of Eastman has been a great honor and truly one of the most rewarding experiences of my life,” Rogers says. “I am proud of what the entire Eastman team has accomplished over the past several years, and I have complete confidence that the company is well positioned to continue delivering consistent, superior value to our stockholders.

“I am pleased to pass the reins to Mark and our talented team of executives,” Rogers continues. “Mark is a proven leader who has been instrumental in developing and executing Eastman’s strategic plans for growth. I look forward to my continued service as executive chairman and to working with Mark to ensure a seamless transition.”

“I am honored to have been selected by the board of directors to lead Eastman as the next CEO and as a director,” says Costa. “I personally want to thank Jim for all that he has done for Eastman and for his incredible example of real leadership. I especially appreciate the opportunity to continue working with executive vice president Ron Lindsay and the rest of the executive team as we implement Eastman’s growth strategy.”

Costa currently heads the company’s Additives and Functional Products and Advanced Materials segments. He also serves as chief marketing officer and has responsibility for the company’s corporate innovation organization.

Speaking on behalf of Eastman’s Board of Directors, lead director Stephen R. Demeritt says, “Jim has courageously led Eastman through a time of tremendous change and we could not be more pleased with what he has accomplished as CEO. We look forward to his continuing contributions as executive chairman of the board.

“Eastman is fortunate to have a senior leadership team of incredible breadth and depth,” adds Demeritt. “We have tremendous confidence in Mark and the rest of Eastman’s executives to execute the company’s plans for growth and take Eastman to even greater success.”

As for growth in the window film sector of the company, Rogers and Costa both say they foresee further progress.

“Mark is going to be better than me at driving the organic growth,” says Rogers. “He’s very good at … developing products. Over the next few years, organic growth is going to be extremely important. That plays right to his strength … Mark was a leader in the acquisition of Solutia.”

“The integration [of Solutia] is going much better than I expected,” says Costa. “We’re seeing a number of opportunities to accelerate performance … especially in Interlayers and Performance Films. We’re continuing to find significant gains from Performance Films.”

“The enhanced technology center is Eastman’s commitment to developing capabilities and growth in Singapore and the region,” says Dr. Gregory W. Nelson, senior vice president and chief technology officer. “It also demonstrates Eastman’s dedication to sustainability and echoes Singapore’s sustainability blueprint for enhanced resource efficiency to help overcome resource limitation for growth.”

“Eastman’s newly completed Asia Pacific Technical Center allows the company to better support its customers’ evolving needs. Through its comprehensive presence in Singapore—from manufacturing to innovation and HQ activities—and by leveraging Singapore’s innovation capabilities and proximity to the consumer, Eastman will be able to develop innovative and sustainable solutions in Asia for Asia,” adds Eugene Leong, director for energy and chemicals at the Singapore Economic Development Board.

The Asia Pacific Technical Center also includes the Solutia Technical Services Team following the $4.8 billion acquisition of Solutia in 2012. The company says in a statement it plans to “further strengthen local headcount in the next few years to grow the Performance Films and Interlayers businesses in Asia Pacific” as part of what it calls “a diversified portfolio strategy for sustainable growth.”

According to the report, sales revenue for Q1 was $2.3 billion, a 27-percent increase compared with the first quarter of 2012. Q1 included sales revenue from the acquired Solutia businesses. Pro forma combined sales revenue declined 1 percent.

Results from Q1 included sales revenue and operating earnings from the acquired Solutia interlayers and performance films product lines. Pro forma combined sales revenue increased primarily due to higher sales volume of interlayers products, particularly in Asia, attributed to strengthened demand in the transportation market and higher sales volume for Eastman Tritan™ copolyester. Excluding first-quarter 2012 restructuring charges, pro forma combined operating earnings increased to $65 million in Q1 of 2013 compared with $61 million in first quarter 2012 primarily as a result of slightly higher sales volume and increased sales of higher-margin products, including interlayers with acoustic properties, Eastman Tritan™ copolyester, and V-Kool® brand window films, according to a company statement.

Operating earnings in first quarter 2013 were $393 million compared with $264 million in first quarter 2012. Excluding Solutia acquisition-related costs and charges in both periods, operating earnings were $403 million in Q1 of 2013 and $273 million in Q1 of 2012. First quarter 2013 included operating earnings from the acquired Solutia businesses. Pro forma combined operating earnings, excluding Solutia acquisition-related costs and charges, were $403 million in first quarter 2013 compared with $363 million in first quarter 2012. Pro forma combined operating earnings increased primarily due to lower raw material and energy costs partially offset by lower selling prices.

“Our portfolio of specialty businesses continued to deliver strong earnings in the first quarter despite uncertain global economic conditions,” says Jim Rogers, chairman and CEO. “For full year 2013, we remain on track to achieve a fourth consecutive year of double-digit earnings growth while also generating strong cash flow.”

Commenting on the outlook for full year 2013, Rogers says: “We expect our leadership positions in key end-markets, the diversity of the end-markets we serve and our broad geographic footprint to continue to position us well for strong earnings growth. However, global economic uncertainty continues with particular weakness in Europe, and raw material and energy costs remain volatile.”

“We are honored to have received the 2013 AIMCAL Technology of the Year award. This award recognizes the significance of the technological advances found in EnerLogic 35 window film and its contribution to the field of retrofit building envelope energy savings,” says Travis Smith, vice president and general manager of Performance Films for Eastman.

According to a statement from the company the award is given to the “most significant new technology that impacts the converting industry of consumer market and stands out among the many industry innovations and advances.”

“Windows account for between 25 and 40 percent of annual HVAC costs,” says Jeremy Verstraete, global business manager for Eastman. “EnerLogic VEP35 can reduce HVAC usage, control energy costs and preserve views. Return on investment (ROI) is typically achieved in less than three years, but utility rebates and tax incentives may provide an even faster ROI. We’re very honored that AIMCAL recognized this energy-efficiency solution.”

EnerLogic VEP35 also earned the Technical award in the Other category for AIMCAL’s Vacuum Metalized or Coated Product competition.

One judge said having the film is “like adding a storm window.” Judging was conducted by a team of independent, nonaffiliated associates selected from diversified market areas selected for their expert knowledge and experience.

Eastman Chemical Co. officials consider the recent acquisition of Solutia Inc. of St. Louis, an important step in Eastman’s strategy to extend its global presence in emerging markets, in particular in Asia Pacific, says Tracy Broadwater, corporate communications manager of Eastman. “By leveraging infrastructure in the region, Eastman expects to have a compound annual growth rate in Asia Pacific approaching 10 percent for the next several years,” she says. 

Solutia is a manufacturer of performance materials and specialty chemicals, primarily in the construction, transportation, energy and manufacturing markets.

The time was ripe for the acquisition, Broadwater says. “Solutia is a good investment that is well-managed with well-established businesses,” she says. “Eastman has been aggressively pursuing a growth strategy, and acquisitions have been an important part of that strategy. We have made a number of acquisitions over the past two years, and though this is the largest of those, we are approaching this acquisition from a position of strength.” 

None of those acquisitions were in the glass and glazing industry, Broadwater clarifies. 

Currently, Eastman is one of the largest companies in its field with a combined EBITDA margin of approximately 20 percent and an EBITDA of approximately $1.8 billion. “This acquisition will strengthen Eastman as a top-tier North American chemical company,” Broadwater says. 

Regarding changes at Solutia as a result of the acquisition, Broadwater says “recognizing that we haven’t even closed on the deal at this point, it would be premature to comment until we are further in the process.” The transaction is expected to close in mid-2012. “Due to the size of this acquisition we expect a great deal of our focus will be spent integrating Solutia into Eastman,” she says. “However, we expect to continue to evaluate appropriate opportunities for expansion on a number of fronts, including emerging markets, access to feedstock, differentiated products or markets and sustainability, which have been Eastman’s key focus areas for M&A [marketing and analysis] opportunities.”

The transaction also is “expected to deliver immediate value to our stockholders in the form of accretion and strong cash generation, as well as create potential upside through the combination of two leading global chemical companies,” says Jim Rogers, chairman and CEO of Eastman, in a company release. Under the terms of the agreement, Solutia stockholders will receive $22 in cash and 0.12 shares of Eastman common stock for each share of Solutia common stock. Based on recent closing prices, Solutia shareholders will receive cash and stock valued at $27.65 per Solutia common share, representing a premium of 42 percent and a total transaction value of approximately $4.7 billion, including the assumption of Solutia’s debt.

One night this week my husband and I were watching ESPN and he turned to me and asked, “What do you think is going to happen to Peyton?”

In the spirit of confident denial I simply said, “He’ll play.”

Well I’m getting nervous, folks (and dreading that I am wrong in front of my husband). I’m now crossing my fingers that we haven’t seen the last of my favorite athlete. You can only be in denial so long before the ugly truth forces you to face the music.

We certainly know a thing or two about change here in the window film industry. Only so many acquisitions can happen before it really sinks in that the industry is shrinking. Just last Friday we broke the news that Solutia had been acquired by Eastman. Another major window film manufacturer is being brought under another company’s wings. In 2011, we saw Solar Gard Specialty Films move to Saint-Gobain and we saw Solutia acquire Southwall Technologies. I wonder if the manufacturers’ acquisitions and mergers mean something to window film dealers. Does it concern you? Are you more concerned with increasing business in-house than what the film suppliers are doing?

 However, the wonderful part about our industry is that we have a product with a lot of value. While the industry may go through bouts of shrinking and growing, there is a demand for our product and the future certainly looks bright for energy conservation products. We are forever changing and adapting and that is one thing that I know I am not in denial about.

Share your thoughts on the recent acquisition by emailing me at komara@glass.com.

Officials at Eastman Chemical Co. of Kingsport, Tenn., and Solutia Inc. of St. Louis, have entered into a definitive agreement, under which Eastman will acquire Solutia. Under the terms of the agreement, Solutia stockholders will receive $22 in cash and 0.12 shares of Eastman common stock for each share of Solutia common stock.

“Solutia board of directors has agreed to a merger with Eastman Chemicals for an enterprise value of approximately $4.7 billion,” says Melissa H. Zona, director of corporate communications at Solutia. “Eastman’s offer represents a substantial premium for our shareholders. The agreement calls for the merger of the companies, which Solutia’s board of directors unanimously recommends be adopted by its shareholders.”

The merger creates a company with combined revenues of about $9.3 billion, Zona says. 

“The merger is financially compelling for Solutia’s shareholders, delivering immediate value and enabling investors to benefit over the long term from the combined company’s growth,” Zona adds. Solutia shareholders will receive cash and stock valued at $27.65 per Solutia common share, representing a premium of 42 percent and a total transaction value of approximately $4.7 billion, including the assumption of Solutia’s debt, she says.

“The acquisition of Solutia is a significant step in our growth strategy and one that I am confident will strengthen Eastman as a top-tier specialty chemical company with strong, stable margins,” says Jim Rogers, chairman and CEO of Eastman, in a company release. “The addition of Solutia will broaden our geographic reach into emerging geographies, particularly Asia Pacific, establish a powerful combined platform with extensive organic growth opportunities, and expand our portfolio of sustainable products, all of which are consistent with our growth strategy.

“This transaction is also expected to deliver immediate value to our stockholders in the form of accretion and strong cash generation, as well as create potential upside through the combination of two leading global chemical companies,” Rogers says in the release.

“This complementary transaction will accelerate the growth of our businesses around the world,” says Jeffry N. Quinn, chairman, president and CEO of Solutia, in the release. “This transaction provides Solutia’s shareholders with immediate value and an attractive premium, as well as the opportunity to benefit from the future prospects of a leading global chemicals producer with the financial strength, a diversified mix of premium products, and the geographic footprint to capitalize on long-term growth opportunities.”

In 1999 Solutia purchased CP Films.

Click here for more details.

Performance Films Distributing headquarters

There is much in store for 2012 at Performance Films Distributing. With the late 2011 announcement of the renewal of the company’s distributorship agreement with Solutia, 2012 is off to a strong start for the company.

“We are extremely happy that Solutia has renewed the agreement,” says Bo Ryan, vice president of Performance Films Distributing. “We are looking forward to progressing with Solutia and it puts our customers at ease to know there will be stability with the Solutia brand and with us as their distributor.”

Performance Films Distributing will continue to serve as the exclusive supplier of LLumar, Vista and Formula One window films in the Midwest through 2015.

“As the last independent distributor left, I believe Solutia is confident that we have and will continue to deliver value to our customers,” says Ryan.

Hinting at some possible surprises in 2012, Ryan adds that what they have in store for the new year includes a new approach to the window film market.

“Our focus is to provide our market with a new and fresh approach adding value to our customers and continue to serve our customers the best way possible. Our growth strategies for 2012 are all focused on understanding our customers’ needs and developing solutions to meet those needs,” says Ryan.

“Solutia has shown that they are interested in what they can do globally,” says John Rodie, co-owner of Film South Inc. in Central Georgia and Alabama and a Solutia dealer. “If you talk to any installer they will tell you that their residential work has gone down dramatically over the last few years. With my impression of Southwall I don’t expect a dramatic change. If the economy comes back and Solutia incorporates Southwall’s products into their product line I can see some positive things. Hopefully, some of the new technologies will help the film industry. It has not been something they broadcasted to dealers though.”

Some dealers are not clear on the goals associated with the acquisition other than Solutia’s continued corporate growth.

“I don’t know a lot about Southwall, but they did send us out an email about the agreement,” says Tim VanDeusen, owner of Pro-Film Window Tinting in Connecticut and a dealer of Solutia products. “I got a sense where they are going with the purchase of HuperOptik and the other companies they have purchased and I see more consolidation in the industry. We haven’t seen anything on our end that has changed, but I think they are just looking to have more of a presence.”

Other dealers are just hoping that there won’t be any major changes to the service they currently receive from Solutia.

“The only real effect that it has on us is that it continues to be a bigger corporation,” says Michelle Porch, co-owner of Pro-Tech USA Window Films and dealer of Solutia products in Covington, La. “As long as they don’t go up on price I think we will always acclimate to new changes.”

Some window film professionals see the combination of major technology as a positive move for Solutia and its continued growth.

“This acquisition is a tremendous value-add to Solutia. The company will now be able to  combine Southwall’s next generation sputtering capabilities of XIR® and ceramic technologies used in Hüper Optik and VKool window films with Solutia Performance Films’ ability to convert the sputtered substrates into a finished product,” says Rob Oranges, the business development manager for Vision Quest Distributing in Sparks, Nev. “Solutia also will benefit from the success of Southwall’s relationships with existing window film marketing channels like Hüper Optik and will be in a better position to service high-growth markets.”

The Solutia acquisition came two months after the announcement that Solar Gard Specialty Films was being acquired by Saint-Gobain Performance Plastics and the industry has been buzzing and transitions and change.

“The recent wave of acquisitions has been interesting,” says Patric Fransko, chief operating officer of Zola Distributing and Service Group Distribution in Fullerton, Calif. “In my opinion, much of the interest from the acquiring companies was based on increasing OEM capabilities, but that can still be beneficial for the window film industry. The exciting thing is that you are seeing increased investment in our industry that should lead to more category awareness. As an industry, we still are reaching such a small percentage of the potential market that increasing awareness should be at the top of everyone’s priority list.”

“This acquisition positions Solutia as the world leader in advanced sputtering technology, combining the industry’s leading commercial expertise with next-generation innovation capabilities to provide advanced film solutions to the premium window film and electronics markets,” says Jeffry N. Quinn, CEO of Solutia. “Our growth strategy remains focused on enhancing our portfolio through synergistic bolt-on acquisitions that allow Solutia to better serve high-growth markets and support the success of our existing businesses. This is just one component of our strategy to put our strong cash flow to work to create value for our shareholders.”

Solutia will gain Southwall’s XIR® Technology, used in VKool films and all of the company’s manufacturing capabilities for window film production. Solutia will also now be offering a new product where film is “encapsulated between Saflex® polyvinyl butyral interlayers to form a protective barrier in laminated glass against the harmful effects of the sun.”

Solutia has announced that  Southwall stockholders will receive $13.60/share in cash for all outstanding shares of Southwall common stock tendered in the offer and accepted for payment by Solutia, representing a 45 percent premium to the closing price per share of Southwall common stock on October 6.

A subsidiary of Solutia will be making a tender offer for the remaining shares of Southwall common stock no later than October 25.

“We look forward to realizing the potential of Southwall’s portfolio of energy efficiency solutions as we combine our innovation in sputtering technology with Solutia’s commercial and market expertise,” says Dennis Capovilla, CEO of Southwall Technologies. “Together we will focus on the delivery of next-generation films to our customers that achieve unmatched levels of solar performance and optical clarity.”