Press Releases
Cytec Announces Agreement to Sell Two Product Lines -
Water Treatment Chemicals and Acrylamide
July 17, 2006
West Paterson, New Jersey – Cytec Industries (NYSE:CYT) said
today that it has reached a definitive agreement to sell its
water treatment chemicals and acrylamide product lines with
estimated 2006 sales of approximately $300 million, to Kemira
Group for approximately $240 million cash. The closing of the
sale is expected in two phases. The first phase, which includes
the entire product lines excluding Cytec’s Botlek manufacturing
site in the Netherlands, is expected to close by the end of
September, 2006. The second phase for the Botlek site is
expected to close in early 2007. Between the closing of phase
one and phase two, Cytec will contract manufacture and sell
water treatment chemicals and acrylamide at the Botlek site
solely to Kemira. The timing of the flow of funds is $220
million upon the first closing with the balance payable upon the
second closing. Both closings are subject to regulatory approval
and certain other conditions.
Included in this transaction are the sales, marketing,
manufacturing, R&D and technical services personnel and four
manufacturing sites, Mobile, Alabama, Longview, Washington,
Bradford, UK, and the Botlek site. Also included in the sale is
the acrylamide manufacturing plant at Cytec’s Fortier, Louisiana
facility which will be operated by Cytec personnel under a long
term manufacturing agreement. Cytec will continue to supply
acrylonitrile to the acrylamide plant under a long term supply
agreement. In addition, under various long term manufacturing
agreements, Cytec will manufacture certain water treatment
products for Kemira at several of its sites and the purchaser
will manufacture for Cytec certain mining chemicals at the
Mobile, Alabama site and various other products at the Botlek
site. Kemira has agreed to offer employment to the approximately
480 employees who are involved in the operations of the product
lines.
David Lilley, Chairman, President and Chief Executive Officer
said, “When reviewing the opportunities of our total business
portfolio, additional investments in these two product lines no
longer fit with our strategic direction, and accordingly, we
decided to sell and let a new owner focus on the opportunities.
These product lines have excellent technology and I would like
to thank the employees of these product lines who have
persevered in some challenging times while keeping the future
growth potential intact. We wish them well.”
Mr. Lilley commented further, “When completed, this transaction
will further streamline Cytec, further improve our balance sheet
and let us increase our focus on our growth businesses. The net
effect of this transaction excluding any anticipated gains on
the actual closings, and giving effect to the use of net
after-tax proceeds to pay down debt is expected to be about
$0.04 dilutive and $0.15 dilutive to earnings per diluted share
in 2006 and 2007, respectively. However, after taking into
account the net effect of our restructuring actions in 2006, we
expect the impact on 2007 earnings per share to be essentially
neutral.
Mr. Lilley continued, “This divestment and our future actions
will demonstrate that we are aggressively pursuing improving our
returns on capital and ultimately shareholder value.”
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained
herein, statements contained in this release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Achieving the results
described in these statements involves a number of risks,
uncertainties and other factors that could cause actual results
to differ materially, as discussed in Cytec’s filings with the
Securities and Exchange Commission.
Corporate Profile
Cytec Industries Inc. is a global specialty chemicals and
materials company focused on developing, manufacturing and
selling value-added products with pro forma sales in 2005 of
approximately $3.2 billion. Our products serve a diverse range
of end markets including aerospace, adhesives, automotive and
industrial coatings, chemical intermediates, inks, mining,
plastics and water treatment. We use our technology and
application development expertise to create chemical and
material solutions that are formulated to perform specific and
important functions in the finished products of our customers.
Back to All Press Releases
|
