ST. LOUIS (Oct. 7, 1 p.m. ET) — Solutia Inc. has agreed to acquire film innovator Southwall Technologies Inc. of Palo Alto, Calif., for about $113 million.
The bolt-on combination would boost St. Louis-based Solutia's capability in advanced film solutions for the premium window film and electronics markets.
Solutia would gain access to Southwall's proprietary XIR-brand laminated glass technology, which can reduce automotive interior solar heat gain more effectively than tinted glass. Sales of V-Kool-brand premium aftermarket window films have driven Southwall gains.
A Solutia spokesperson said the Southwall acquisition is in line with a previously stated strategy for the company and “performance films division to enhance its portfolio with targeted bolt-on acquisitions that support the existing business.”
On Oct. 7, the companies announced the signing of a definitive agreement and plans by Oct. 25 for a Solutia subsidiary to begin a tender offer for outstanding shares of Southwall stock. Solutia's offer represents a 45-percent premium to the closing price of Southwall stock on Oct. 6.
Needham Asset Management LLC fund affiliates and Dolphin Direct Equity Partners LP collectively own about 63 percent of Southwall common stock and convertible preferred stock and support the proposed transaction.
The news comes nine weeks after the Cie. de Gobain performance plastics unit in Aurora, Ohio, disclosed an agreement to buy the Solar Gard-brand specialty films business of NV Bekaert SA of Kortrijk, Belgium. Solar Gard makes coated films at facilities in San Diego and Zulte, Belgium.
On Sept. 14, Solutia lowered its 2011 adjusted earnings-per-share guidance to a range of $1.95-$2.05 from $2.10-$2.25. “This update reflects a slower than expected demand profile primarily for products that serve truck and bus, solar and electronic end markets and continued raw material cost pressure,” the company said.
For the quarter ended June 30, Solutia had profit of $70 million on sales of $543 million vs. profit of $42 million on sales of $502 million in the comparable year-earlier period. Solutia employs about 3,300.
As of Dec. 31, Southwall had 145 employees with automotive and architectural film production in Grossr"hrsdorf, Germany, near Dresden; automotive and architectural film encapsulation in Sun Prairie, Wis.; architectural glass work in Chicago; and research and development functions in Palo Alto.
Southwall reported a loss of $645,000 on sales of $13.5 million for the quarter ended June 30. Southwall had a profit of $3.0 million on sales of $11.8 million in the comparable 2010 quarter.