Rohm and Haas ready for the acquisitions trail

27 July 1998 00:00 [Source: ICB]

Rohm and Haas is looking to add another technology leg to its product portfolio through an acquisition either in the electronic materials or speciality chemicals sectors. This follows its divestments in the AtoHaas and RohMax joint ventures, which were seen to be operating in the higher volume, lower margin sectors.

While the company has so far failed to find a suitable acquisition, Larry Wilson, chairman and chief executive officer, said: 'We have on-going discussions with a number of firms and will continue to do so.' He added that the problem had simply been that 'we frequently cannot make the numbers work. The prices we've seen raise the question of whether paying that much money would be in the long-term interest of Rohm and Haas shareholders'.

His preference area for an acquisition is in electronic materials, a business that has expanded rapidly since the full acquisition of Shipley in 1992. Its microelectronics business is growing at over 20%/year, much stronger than the printed wiring board sector which this year has been flat in terms in sales growth. Shipley is expanding its market share in the newer generation products such as deep UV and advanced I-line photoresists.

Rohm and Haas is also looking at the chemical specialities sector to add to its product portfolios in agricultural chemicals, biocides and ion exchange resins.

Net earnings for Rohm and Haas in the second quarter of 1998 were $170m, which included a one-time net gain of $48 from the sale of its interests in the two joint ventures and other items. Sales at $990m were down 9% on the same quarter last year and 4% on a comparable basis, reflecting the continued strength of the US dollar and slightly lower selling prices.

Wilson said Rohm and Haas was having a pretty strong year in Europe, with double-digit volume growth. However, two businesses were now getting hurt by cheaper imports from Asia. Imports of packaging tape have cut into its sales of emulsions used in packaging tape in Europe, while some Scandinavian paper companies that use Rohm and Haas' polymers are operating at lower rates due to paper coming into Europe from Indonesia.

ROHM AND HAAS SIX MONTH RESULTS ($M)

H1 1998

Change, %

Net sales

1927

(7)

Gross profit

779

Net earnings

279

SOURCE: ROHM AND HAAS

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