Bayer MaterialScience LLC strengthened its polyurethanes portfolio by buying certain product lines from Stepan Co.
The acquired products are pour-in-place, spray and molded PU insulation materials used in appliances, water heaters, doors, roofs, picnic coolers and similar applications. Bayer got intellectual property, know-how and customer lists related to the acquired business.
The purchased business will be integrated into Bayer's BaySystems brand. Stepan will make the products for Bayer at its Millsdale, Ill., facility during a transition period.
``The acquisition reinforces our global systems business and strengthens the breadth and depth of BaySystems' already significant portfolio,'' Jerry MacCleary, Bayer senior vice president for marketing and business development of PU in North America, said in a news release.
The deal gives Bayer access to innovative, proprietary technologies, he said.
The acquired business in the United States, Canada, South America and Mexico had annual sales of about $16 million, according to a news release from Stepan. Although the parties did not release terms of the July 31 deal, Stepan said it will report a pre-tax gain of $9.5 million to $10 million during the third quarter as a result of the sale proceeds.
``The business and technology that we are acquiring complement our existing rigid foam systems well,'' Bayer spokesman Bill Allan said by phone from Bayer's Pittsburgh headquarters.
Following the sale of the commodity PU business, Stepan will continue in specialty PU for military and aerospace uses as well as for coatings, adhesives, sealants and elastomers. It identified those businesses as key components of its growth plan. Stepan of Northfield, Ill., also makes a variety of polyester polyols and other intermediate and specialty chemicals used in household, industrial, agricultural, food, insulation and other products.
Stepan touts itself as a leader in water-blown and hydrocarbon-blown PU products that can replace hydrochlorofluorocarbon-blown products. It also said its experience in surfactants and other chemicals allows it to optimize PU production and performance.
Stepan recorded net profit of $9.7 million on sales of $420.4 million for the second quarter. Bayer MaterialScience LLC had sales last year of 10.4 billion euros ($16.1 billion).