NewsFlashAshland acquires Hercules for $3.3bn

11 July 2008 11:32  [Source: ICIS news]

Ashland to create paper chems giantLONDON (ICIS news)--Ashland has reached an agreement to buy Hercules for $3.3bn (€2.1bn), the two US-based specialty chemicals majors said on Friday.

Ashland will pay $23.01 per Hercules share based on Ashland's July 10 closing stock price and including $0.7 bn of net assumed debt.

The transaction, which would create a major, global specialty chemicals company, was expected to close by the end of 2008.

Ashland said that upon the transaction close it would have pro forma combined revenue for the 12 months ended 31 March 2008 of more than $10bn, including around $3.5bn generated outside North America.

For the same period, Ashland recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of $365m. Hercules’ ongoing EBITDA for the same time period was $392m.

"The acquisition of Hercules fulfils our objective to become a leading specialty chemicals company,” said Ashland chairman and CEO James J O'Brien.

“It creates a defined core for Ashland composed of three specialty chemical businesses with strong market positions and promising global growth potential: specialty additives and ingredients, paper and water technologies, and specialty resins,” he added.

O’Brien said the two companies would combine the paper and water businesses of each company to create one global paper and water technologies business with annual revenue of $2bn.

($1 = €0.63)

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By: Hilde Ovrebekk
+44 20 8652 3214



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