30 November 2006 23:25 [Source: ICIS news]
The sale price of €425m ($563m) was above Credit Suisse’s anticipated range of $450m-$500m, said John McNulty, a research analyst at Credit Suisse.
“The sale of the business [also] shows execution on one of the company’s key promises to the Street, to sell non-core businesses,” he added. Rockwood’s three core sectors are specialty chemicals, pigments and additives, and advanced materials. Novasep, however, is a pharmaceutical and fine chemical services company.
McNulty noted that about $300m from the sale would be used to address the company’s other key promise to Wall Street, to reduce leverage. The remainder, he projected, would be used for “opportunistic bolt-on acquisitions.”
Rockwood shares opened at $25.06 Thursday, rising to a high of $25.67 before closing at $25.31.
The news could carry positive repercussions for Cambrex, according to First Analysis analyst Tracy Marshbanks. Noting that Novasep is comparable to Cambrex’s Human Health business, Marshbanks suggested an upside to the company’s current market price of $22.25/share.
($1 = €0.76)
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