MAYFIELD HEIGHTS, OHIO — Ferro Corp. has sold another piece of itself.
The maker of specialty chemicals said it has completed the sale of its pharmaceuticals business, Pfanstiehl Laboratories in Waukegan, Ill., to PLI Holdings Inc., an affiliate of private equity firm Med Opportunity Partners LLC of Greenwich, Conn.
The buyer is paying $16.9 million in cash and an earn-out incentive payment of up to $8 million, payable over two years based on attained earnings targets. Ferro said it retained certain tax benefits with an estimated value of approximately $5 million.
Ferro's pharmaceuticals business generated segment income of $2.4 million in 2012.
The divestiture follows Ferro's Feb. 6 sale of its solar pastes assets "and marks the continued execution of Ferro's strategy to divest non-core businesses and drive earnings growth and profitability from its core Performance Materials and Performance Chemicals businesses," the company said in a statement.
Ferro's interim president and CEO, Peter Thomas, said the latest sale "is another important milestone in our value creation strategy."
"The Ferro portfolio now is more fully concentrated in our core technologies in coatings and color and glass science, polymer science, and organic synthesis," Thomas said. "Together with our previously announced initiatives to reduce costs by more than $50 million, the successful sale of our solar pastes assets, and the additional financial flexibility gained by amending our credit facility, today's announcement reflects the board's and management's commitment to drive shareholder value from our Performance Materials and Performance Chemicals businesses.
"We will remain focused on improving return on invested capital and cash flow by streamlining operations, reducing operating costs, and pursuing select growth opportunities," Thomas said. "We are energized by the progress we're making and committed to reaching our value creation objectives."
Ferro remains the object of a hostile takeover bid by Fairlawn, Ohio-based A. Schulman Inc.