Subsequent Events

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Note 14 — SUBSEQUENT EVENTS

On July 1, 2020, the Company completed its acquisition of all the equity interests in the global masterbatch business of Clariant AG and the masterbatch business assets in India of Clariant India as part of the Clariant MB Acquisition. The Clariant MB Acquisition increases the Company's scale, product depth and geographic reach in its Color, Additives and Inks segment. Clariant MB has leading portfolios of solid and liquid masterbatches that include sustainable solutions for alternative energy, and reduced requirements for packaging and light weighting. In connection with the completion of the Clariant MB Acquisition and effective as of June 30, 2020, the Company amended its existing Articles of Incorporation to change its name to Avient Corporation. In conjunction with its rebranding and new name, the Company also changed it's ticker symbol from "POL" to "AVNT" effective at the start of trading on July 13, 2020.

Total consideration paid by the Company to complete the Clariant MB Acquisition was $1.4 billion, net of cash, which is preliminary and subject to working capital and net debt adjustments. To finance the all-cash purchase, the Company used $496.1 million in net proceeds from the issuance of common shares in an underwritten public offering completed in February 2020, $640.8 million in net proceeds from a senior unsecured notes offering that was completed in May 2020, with the balance from the net proceeds of the October 2019 sale of PP&S. For additional details related to the sale of PP&S and the senior unsecured notes offering, refer to Note 3, Discontinued Operations and Note 9, Financing Arrangements, respectively. The Clariant MB Acquisition will be accounted for under the acquisition method of accounting and the purchase price will be allocated to the identifiable assets and liabilities. Given the timing of the Clariant MB Acquisition, a preliminary price allocation is not yet available.

Unaudited, estimated pro forma net sales and net income were approximately $4.0 billion and $58.0 million, respectively, for fiscal year 2019. The unaudited pro forma net sales and net income amounts assume that the Clariant MB Acquisition had occurred as of the beginning of fiscal year 2019. This unaudited pro forma information is preliminary and subject to change, is for informational purposes only, and is not necessarily indicative of the operating results that would have occurred had the Clariant MB Acquisition been consummated at the beginning of the 2019, nor is it necessarily indicative of future operating results.

Total acquisition-related costs incurred to date in connection with the Clariant MB Acquisition are $16.7 million, of which $7.9 million and $11.6 million were incurred in the three and six months ended June 30, 2020. These costs were charged to Selling and administrative expense on the Condensed Consolidated Statements of Income.

In connection with the Clariant MB Acquisition, on December 19, 2019, we had entered into a Commitment Letter (the Commitment Letter) with a number of banks (the Commitment Parties), pursuant to which the Commitment Parties provided a 12-month commitment for a $1.15 billion senior unsecured bridge loan facility (the Bridge Facility) for purposes of funding the Clariant MB Acquisition. In lieu of borrowing under the Bridge Facility, we used a portion of the net proceeds from the sale of PP&S, the net proceeds from the issuance of common shares in an underwritten public offering, and the net proceeds from a senior unsecured notes offering to finance the Clariant MB Acquisition, as described above. In connection with the closing of the Clariant MB Acquisition and pursuant to the Commitment Letter, on July 1, 2020, we paid a net fee of $9.7 million to the Commitment Parties.