Press Releases
Cytec
Completes First Phase Sale of Two Product Lines
Water Treatment Chemicals and Acrylamide
October 2, 2006
West Paterson, New Jersey – Cytec Industries (NYSE:CYT)
said today that it has completed the first of three phases of
the sale of its global water treatment chemicals and acrylamide
product lines to Kemira Group. This phase includes the entire
product lines with the exception of Cytec’s Botlek manufacturing
site in the Netherlands, which is expected to close in early
2007, and certain assets at various subsidiaries in Asia/Pacific
and Latin America which are expected to close within the next
six months. The timing of the flow of funds is approximately
$208 million received today for this closing, an estimated $20
million upon the Botlek closing and an estimated $12 million
upon completion of the transfer of the assets at the various
subsidiaries for an estimated total of $240 million. Between
this closing and the remaining applicable closings, Cytec will
contract manufacture and sell water treatment chemicals and
acrylamide at the Botlek site solely to Kemira and provide
distribution services for Kemira for the products at those Cytec
subsidiaries that were not included in this closing. The
remaining closings are subject to certain conditions and the
amounts could change due to final working capital transferred.
The estimated 2006 sales of the two product lines are
approximately $300 million.
Included in this phase of the transaction are essentially all of
the sales, marketing, manufacturing, R&D and technical services
personnel and four manufacturing sites, Mobile, Alabama,
Longview, Washington, Bradford, UK, and 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 also continue to supply
acrylonitrile to the Kemira 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 Kemira
will manufacture for Cytec certain mining chemicals at the
Mobile, Alabama site and various other products at the Botlek
site.
David Lilley, Chairman, President and Chief Executive Officer
said, “I want to thank the Cytec and Kemira employees who have
worked hard to complete this phase one closing on schedule while
maintaining the ongoing business of the product lines. We wish
the transferred employees and Kemira well.”
Mr. Lilley commented further, “Net after-tax proceeds from this
transaction will be used to pay down debt and further improve
our balance sheet. As a reminder, the net effect of this
divestiture, 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 previously announced restructuring actions in 2006, we
expect the impact on 2007earnings per share to be essentially
neutral. We will now move forward with a keen concentration on
our growth businesses.”
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. Our products serve a diverse range
of end markets including aerospace, adhesives, automotive and
industrial coatings, chemical intermediates, inks, mining and
plastics. 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.
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