In another composites market consolidation, Cytec Industries Inc. of West Paterson, N.J., said July 9 it has reached a definitive agreement to acquire American Materials & Technologies Corp. of Los Angeles in an all-stock transaction.
Upon closing — expected in the fourth quarter — American Materials shareholders will receive the equivalent of $6 per share in Cytec stock, for a total of about $31 million. Cytec also will assume about $7 million in debt.
In July 1996, American Materials' initial public offering was priced at $5.50 per share; the Nasdaq small-cap issue closed July 8 at $3 per share.
An American Materials unit has particular strengths in phenolic prepreg materials, PMR-15 and heat-absorbing ablative plastics that may fit with a Cytec subsidiary's operations in, respectively, Anaheim and Orange, Calif.; Greenville, Texas; and Winona, Minn. PMR-15 is a licensed high-temperature resin formulation used in jet engine applications.
Paul Pendorf and others formed American Materials, acquiring Los Angeles aerospace prepreg and material supplier Structural Polymers Inc., now the Culver City Composites subsidiary, for $5.7 million in December 1995 and golf club shaft maker Grafalloy LP of El Cajon, Calif., for $9.6 million in February 1997. Pendorf is American Materials' president and chief executive officer.
American Materials had 169 permanent and 76 temporary employees as of Dec. 31. The firm lost $5.89 million on 1997 sales of $30.4 million. Boeing Co. and General Electric Co. accounted for 19 percent of American Materials' sales.
In the quarter ended March 31, the firm reported profit of $350,000 on sales of $11.7 million.
The American Materials deal follows Cytec's Sept. 30 acquisition of Fiberite Inc. for $344 million and the establishment of the Cytec Fiberite subsidiary in Tempe, Ariz.
Also in September, Culver City Composites filed an antitrust suit against Fiberite and Cytec in U.S. District Court in Los Angeles. That litigation is not likely to proceed.
Cytec Industries, a vertically integrated chemical firm, employs 5,200 and reported profit of $113.6 million on 1997 sales of $1.29 billion.