Cytec Industries Inc., a specialty chemicals and materials company based in Woodland Park, N.J., plans to acquire the outstanding shares of Umeco plc.
The all-cash transaction for Umeco, a global provider of advanced composite materials based in Leamington Spa, England, is valued at $439 million.
The purchase will boost Cytec's presence in aerospace and industrial applications and in advanced composite materials.
In an April 12 conference call, Cytec Chairman, President and CEO Shane Fleming said the company intends to leverage Umeco's presence in Europe and China to benefit global distribution.
The acquisition overview estimated earnings-per-share accretion for the rest of 2012 at 20 cents per share, jumping to 65 cents per share in 2013, including synergies.
Cytec will finance the acquisition through cash on hand and $210 million drawn under its $400 million credit revolving facility. Fleming said initial synergy targets include raw materials, administrative areas and added revenue totaling about $15 million.
“We believe [Umeco's] sophisticated application development capabilities will be key to facilitating the broad adoption of carbon-fiber composites, particularly in the emerging automotive market,” Fleming said.
The acquisition will result in two reporting segments, with Umeco's advanced materials business being integrated into a High-Performance Industrial Materials segment and Cytec's Engineered Materials segment continuing to focus on aerospace.
No significant workforce reductions are expected, Cytec said. It employs 1,000 worldwide.
The deal, subject to shareholder approval, is expected to close in the third quarter of 2012.