04 March 2013 13:32 [Source: ICIS news]
LONDON (ICIS)--A Schulman is bidding to acquire fellow Ohio-based specialty chemicals producer Ferro Corporation with an offer based on an estimated total enterprise value of $855m including an equity value of $563m (€434m), A Schulman said on Monday.
Arguing that the two companies would make a “compelling combination”, A Schulman said it was encouraging Ferro shareholders to ask their board to re-examine their opposition to accepting a bid.
The acquisition price, at $6.50 share, represented a 32% premium over the volume-weighted average trading price of Ferro over the previous 60 days and, if accepted, would be paid half in cash and half in shares of A Schulman common stock, it added.
A successful combination of A Schulman and Ferro would result in estimated annual savings of $35m over and above previously announced Ferro targets once cost savings and synergies were fully implemented, A Schulman said.
"A Schulman and Ferro are both recognised leaders in specialty chemicals with value-added product lines, similar business models, complementary competencies, markets and applications," said Joseph Gingo, chairman, president and CEO of A Schulman.
"Ferro's business units align with A Schulman's core competencies with the exception of pharmaceuticals, which is not strategic to us. We see substantial synergies and both geographic and market growth opportunities resulting from this compelling combination, which we would hope to be a consensual transaction,” he added.
A Schulman said it had expressed its "strong intent" in pursuing the combination of the companies in a letter to Ferro dated 13 February, but Ferro's board expressed their belief that their company should remain independent.
"We have tremendous respect for Ferro and its people," said Gingo. "However, cash flow is required not only for the restructuring efforts already publicly identified by Ferro, but also for growth, the capacity to be opportunistic in the marketplace, and the ability to create value for shareholders," he added.
A Schulman is an international supplier of high-performance plastic compounds and resins headquartered in Akron, Ohio. Its customers come from markets including packaging, mobility, building and construction, electronics and electrical, agriculture, personal care and hygiene, sports, leisure and home and custom services. The company employs approximately 3,300 people and has 34 manufacturing facilities globally. Its net sales stood at $2.1bn for the fiscal year ended 31 August 2012.
Ferro Corporation is a global supplier of technology-based performance materials for manufacturers, headquartered in Mayfield Heights, Ohio. The company has approximately 4,950 employees and reported 2011 sales of $2.2bn.
($1 = €0.77)
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