19 April 2012
19 April 2012
Cytec Industries firmly intends to acquire all of the outstanding shares of Umeco in an all-cash transaction valued at approximately $439 million (£274.3 million based on a 1.60 exchange rate).
According to Cytec, the board of directors of Umeco intends to unanimously recommend the transaction to Umeco shareholders. The acquisition of Umeco will allow Cytec to further enhance and leverage its position as a technology leader in advanced composite materials. The transaction will expand Cytec’s presence in both aerospace and industrial applications, an area where Cytec sees excellent opportunities for growth and value creation.
“We are excited about combining Umeco with Cytec’s existing advanced composites businesses. It greatly improves our composite presence in the industrial sector, where we see tremendous potential for significant value creation in applications like automotive as customers seek to reduce weight and CO2 emissions. In addition, the acquisition also enhances our near-term composite capacity while we complete capital investments over the next few years,” said Shane Fleming, Chairman, President and Chief Executive Officer. “This transaction is consistent with our strategy to focus on profitable and growing segments where we can leverage our technological leadership. The acquisition of Umeco will provide us with additional scale, a dedicated supply chain well-tailored to the needs of the high performance industrial sector and application development capabilities that will help us respond quickly and effectively to customers’ needs.”
Cytec expect the transaction to be immediately accretive to their earnings per share. It will extend their portfolio of products, add new revenue streams, and enhance production capacity that will enable the combined company to leverage its strong customer relationships and partner network to expand distribution worldwide. Year one targeted synergies are in raw material costs, administrative areas and increasing aerospace revenue from added capacity which are approximately $15 million with additional synergies anticipated over time as we move through the integration process. The estimated EPS accretion for the remainder of 2012 is approximately $0.20 per share and full year 2013 is estimated at approximately $0.65 per share including synergies.
Mr. Fleming continued, “This transaction is an important step forward as we position Cytec with an industry-leading portfolio of growth businesses within our Engineered Materials and In Process Separation growth platforms. We will continue to build on our recent success in capturing new business and penetrating the market with our advanced technology solutions as we seek to deliver enhanced value to our stakeholders.”
Cytec expects to finance the acquisition using cash balances on hand, including $210 million recently drawn down under its $400 million credit revolver facility, with the objective of maintaining an investment grade profile.
Upon completion of the transaction, Cytec will organise the combined assets in two separate reporting segments. Umeco’s advanced materials business will be integrated into a newly created High Performance Industrial Materials (“HPIM”) segment that will focus on non-aerospace growth markets. Cytec’s Engineered Materials (“CEM”) segment will continue to focus on aerospace growth opportunities. Cytec does not anticipate significant workforce reductions resulting from this transaction, which is intended to accelerate growth in Industrial markets and thereby create additional opportunities for profitable growth.
Cytec explain that both companies’ boards of directors have unanimously approved the transaction, full details of which are contained in an announcement made today in the United Kingdom under Rule 2.7 of the U.K. Takeover Code. They say that each Umeco director intends to vote in favour of the transaction, as each Umeco director who holds Umeco share has irrevocably undertaken to Cytec in relation to Umeco shares in which he holds an interest. Cytec says it has also received irrevocable commitments from three shareholders to vote approximately 30% of Umeco’s outstanding shares in favour of the transaction. These irrevocable commitments are subject to certain conditions, further details of which are described in the Rule 2.7 announcement. The transaction is expected to close in the third quarter of 2012.
The transaction will be structured as a “scheme of arrangement” under English law, and is subject to the approval of Umeco shareholders as well as other customary closing conditions, including approvals from relevant regulatory authorities and the U.K. High Court. The acquisition will be subject to the terms and conditions set out in the announcement made today in the U.K., and subject to such further terms as will be set out in the scheme of arrangement document to be delivered to Umeco shareholders. To become effective, the scheme of arrangement requires, among other things, the approval of a majority in number of Umeco shareholders, present and voting either in person or by proxy, representing 75% or more in value of the Umeco shares held by all holders. The acquisition is also subject to customary regulatory approvals. Upon the scheme of arrangement becoming effective, it will be binding on all Umeco shareholders.
Cytec explain that Barclays is acting as financial advisor and Squire Sanders is acting as its legal advisor.
TRB Lightweight Structures is delighted to announce it has been selected by Elekta as one of its top twenty suppliers. The company will manufacture a lightweight flooring solution which will be used in the rooms, or bunkers, that accommodate Elekta’s Unity MR-linac.
Researchers from Defence Science and Technology (DST) and USQ are working on a three-year collaborative project to develop next-generation repairs for composite aircraft structures.
Boeing has delivered the first of ten 787 Dreamliners to WestJet, marking the start of the airline's global expansion. Having long operated a fleet of Boeing single-aisle jets, WestJet will use the super-efficient, long-range 787-9 Dreamliner to profitably serve new international routes.