Yule Catto to acquire emulsion polymer producer PolymerLatex

13 December 2010 10:46  [Source: ICIS news]

LONDON (ICIS)--Yule Catto has agreed to acquire Germany-based emulsion polymer producer PolymerLatex from private equity company, TowerBrook Capital Partners for total cost of €443m ($583m), the UK specialty chemicals company said on Monday.

Yule Catto said the acquisition would give the group increased scale and market share, a broader product offering, a gain of European manufacturing assets, as well as additional nitrile latex capacity in Malaysia.

The deal would also help accelerate Yule Catto's strategy of growing its polymer chemicals division in attractive emerging markets, it said.

Yule Catto forecast that the enlarged group would achieve annual cost synergies of at least £20m (€24m) through efficiency improvements within the manufacturing operations and the selling, general and administrative functions of the new company.

“The acquisition of PolymerLatex represents a transformational opportunity for Yule Catto,” said Adrian Whitfield, Yule Catto CEO.

“It creates a group with increased scale, an enhanced product portfolio, stronger market positions and greater efficiencies, all of which provide a foundation from which to grow and compete more effectively in a consolidating emulsion polymers market.

“At the same time, it supports our long-term strategy by providing a stronger platform and the necessary cash generation to accelerate our growth in emerging markets,” he added.

Yule Catto proposed to partly fund the acquisition and associated fees and expenses with of a rights issue at a price of 116p per share, on the basis of four new shares for every three held, which would raise gross proceeds of around £225m.

Yule Catto has divested several non-core assets to focus primarily on its polymer chemicals division, which accounted for over 80% of revenues and almost 90% of divisional operating profits in 2009, it said

In the year ended 31 December 2009, PolymerLatex Group achieved underlying sales of €386.7m and underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of €54.6m, Yule Catto added.

($1 = €0.76)

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By: Franco Capaldo
+44 (0)20 8652 3214



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