FAIRLAWN, OHIO — Compounder and resin distributor A. Schulman Inc. has made an offer to buy Ferro Corp., a specialty chemical company with compounding operations.

Schulman disclosed the offer on March 4, but noted that Ferro had turned down the deal.

Fairlawn-based Schulman said it first contacted Ferro in November, and that it had expressed its "strong intent" in pursuing a deal in a letter to Ferro on Feb. 13. Ferro's board "rejected A. Schulman's offer and expressed their belief that the company should remain independent," Schulman disclosed.

The offer is for $6.50 per Ferro share — half in cash, half in Schulman common stock. According to Schulman, the offer represents an estimated total enterprise value of $855 million including equity value of $563 million —- and a 25 percent premium over Ferro's March 1 closing price.

"A. Schulman and Ferro are both recognized leaders in specialty chemicals with value-added product lines, similar business models, complementary competencies, markets and applications," said Joseph Gingo, Schulman's chairman, president and CEO, in a news release. "We believe our combination will deliver superior value to our respective shareholders and offer better value to customers, and we would welcome the opportunity to engage in a mutually beneficial dialogue with Ferro's board and management."

Gingo said the deal would provide annual synergies of $35 million — including consolidation of corporate offices, integration of the plastics business, pricing and sourcing efficiencies, cross selling and value selling.

"Accordingly, we request the Ferro board reconsider their expressed position to remain independent. We also encourage Ferro shareholders to communicate with their Board, and ask them to re-examine their decision regarding our offer. We believe that our offer will bring attractive and timely value creation to both Ferro and A. Schulman shareholders," Gingo said.

Ferro is based in Mayfield Heights, Ohio. The company's specialty plastics business includes filled and reinforced plastics, liquid colors, dispersions, gelcoats, and advanced alloys and compounds.

Ferro has been a company in turmoil since last year.

Last November, James Kirsch, chairman, president and CEO of Ferro, resigned from those posts, less than three weeks after the company on Oct. 30 posted a third-quarter loss of $316 million as it absorbed significant charges related in part to its beleaguered solar pastes business.

On Feb. 6, Ferro said it sold its solar pastes business to Heraeus, a privately owned precious metals and technology company based in Hanau, Germany. Terms of the transaction were not disclosed.

In January, a group of Ferro investors said it planned to nominate three directors for election to the company's board.

The group calls itself the Shareholder Committee for the Future of Ferro and is led by FrontFour Capital Group LLC of Stamford, Conn., and Quinpario Partners LLC of New York. It said it is nominating the three director candidates — David A. Lorber, Jeffry N. Quinn and Nadim Z. Qureshi — because it is concerned about Mayfield Heights-based Ferro's “historic and current under-performance.”

Scott Suttell, managing editor of Crain's Cleveland Business, contributed to this report.