Cytec to Acquire Advanced Composite Materials Company Umeco plc
(Thomson Reuters ONE) -
Cytec to Acquire Advanced Composite Materials Company Umeco plc
Accelerates Cytec's Focus on High Performance Growth Segments
Enhances Existing Industrial Market Presence in Advanced Composites and Provides
Large Application Development Group
Transaction Immediately Accretive to Cytec's Earnings Per Share
Cytec to Exceed Q1 Consensus Earnings Estimates
Woodland Park, N.J. - April 12, 2012 - Cytec Industries Inc. (NYSE: CYT) today
announced its firm intention to acquire all of the outstanding shares of Umeco
plc ('Umeco') (LSE: UMC.L), an international provider of advanced composite
materials, in an all-cash transaction valued at approximately $439 million
(£274.3 million based on a 1.60 exchange rate). 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."
Neil Johnson, Non-executive Chairman of Umeco, commented, "Umeco is an excellent
fit with Cytec, which can draw on Umeco's technological capabilities,
infrastructure and existing customer base as it continues to build on its
industry-leading expertise in advanced composite materials. Further, the
acquisition will expand and enhance Cytec's product and service offering with
the addition of the Process Materials business."
Founded in 1917, Umeco plc is an international provider of advanced composite
materials, primarily to the aerospace and defense industries, and industrial
sectors such as automotive. Serving high growth, global end markets, Umeco's
Structural Materials business focuses on the development, manufacture and supply
of advanced composite materials, and its Process Materials business focuses on
the development, manufacture and supply of processing materials for the
composites industry. Umeco is headquartered in the U.K. and reported revenues
of £207 million ($332 million assuming a 1.60 exchange ratio) in its most recent
financial year ended 31 March 2011.
The transaction is expected to be immediately accretive to Cytec's earnings per
share. It will extend Cytec's 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."
Financing
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.
Organization and Management
Upon completion of the transaction, Cytec will organize 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.
Terms and Approvals
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. Each Umeco director intends
to vote in favor 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 has also received irrevocable commitments from
three shareholders to vote approximately 30% of Umeco's outstanding shares in
favor 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.
Barclays is acting as financial advisor to Cytec and Squire Sanders is acting as
its legal advisor.
First Quarter Financial Update
Separately, Cytec also announced today that it estimates its adjusted earnings
per share for the first quarter of 2012 to be between 45% and 50% above the
current consensus analyst estimate of $0.85 per share. The key drivers for the
quarter are the continued growth in the Engineered Materials and In Process
Separation segments and better than expected start to the year in Coating
Resins. Cytec will provide full details of the first quarter results including
updated 2012 guidance in its first quarter earnings conference call scheduled
for April 20, 2012 at 11:00am ET. Details for this call were provided in a
separate release issued on March 29.
Investor Conference Call to be held on April 12 at 8:30 a.m. ET
Cytec will host a live conference call today, April 12 at 8:30 a.m. ET to
discuss the Umeco transaction. Interested parties may listen to the conference
call by dialing (888) 894-3692
(U.S. & Canada) or (706) 902-4297 (International) and using access code
70797108.
A live webcast of the conference call may be accessed through the Investor
Relations section on Cytec's web site at www.cytec.com.
A presentation will be made available shortly before the call via Cytec's
Investor Relations website. A replay of the webcast will be available for 3
weeks via Cytec's investor relations website.
About Cytec
Cytec's vision is to deliver specialty chemicals and materials technologies
beyond our customers' imagination. Our focus on innovation, advanced technology
and application expertise enables us to develop, manufacture and sell products
that change the way our customers do business. These pioneering products perform
specific and important functions for our customers, enabling them to offer
innovative solutions to the industries that they serve. Our products serve a
diverse range of end markets including aerospace composites, structural
adhesives, automotive and industrial coatings, electronics, inks, mining and
plastics.
About Umeco
Umeco is an international provider of advanced composite materials primarily to
the aerospace & defense, wind energy, recreation and automotive industries.
Umeco is managed through two continuing business streams:
· Structural Materials - development, manufacture and supply of advanced
composite materials; and
· Process Materials - development, manufacture and supply of vacuum
bagging materials.
Use of Non-GAAP Measures
Management believes that adjusted earnings per share, which are non-GAAP
measurements, are meaningful to investors because they provide a view of the
Company with respect to ongoing operating results. Such non-GAAP measurement is
not recognized in accordance with generally accepted accounting principles
(GAAP) and should not be viewed as an alternative to GAAP measures of
performance.
Forward-Looking Statements
Except for the historical information and discussions contained herein,
statements contained in this release may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Achieving the results described in these statements involves a number of risks,
uncertainties and other factors that could cause actual results to differ
materially, as discussed in Cytec's filings with the Securities and Exchange
Commission.
Barclays, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Cytec and Cytec UK
Holdings Limited and no one else in connection with the transaction and other
matters referred to in this announcement and the scheme document and will not be
responsible to any person other than Cytec and Cytec UK Holdings Limited for
providing the protections afforded to clients of Barclays nor for giving advice
in relation to the transaction or any other matter or arrangement referred to in
this announcement.
Contact:
Jodi Allen
Investor Relations
(973) 357-3283
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Cytec Industries Inc via Thomson Reuters ONE
[HUG#1601738]
Unternehmensinformation / Kurzprofil:
Datum: 12.04.2012 - 08:13 Uhr
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News-ID 134206
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