Coatings producer Ferro Corp. of Mayfield Heights, Ohio, has agreed to be acquired by mineral and chemicals company Prince International Corp. in a $2.1 billion, all-cash transaction that ultimately will take the company private.
Ferro said in a news release issued May 11 that the purchase price represents 12.4 times adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and includes the assumption of debt, net of cash.
The deal has been unanimously approved by the Ferro board of directors. Under terms of the deal, Prince, a unit of private equity firm American Securities LLC, will acquire all common stock outstanding of Ferro for $22 per share in cash. The purchase price represents a 25.1 percent premium to the closing stock price on May 10 of $17.58 per share and a 33.8 percent premium to the 90-day, volume-weighted average price.
The transaction is subject to customary closing conditions, including the approval of Ferro's shareholders and regulatory approvals. Ferro said it expects the deal to close in the first quarter of 2022. Until the deal is completed, Ferro will continue to operate as usual, including all reporting required as a publicly traded company. Upon completion of the transaction, Ferro will become a privately held subsidiary of Prince, and shares of Ferro common stock no longer will be listed on any public market.
The deal "represents compelling value for our shareholders, as well as a great opportunity for our employees," said Peter Thomas, Ferro's chairman, president and CEO, in a statement. "We are pleased to be able to partner with a market leader like Prince to grow our businesses on a truly global scale."
Prince said in a news release that when the deal is complete, Ferro will be combined with another Northeast Ohio company, Chromaflo Technologies, which also is part of the American Securities portfolio, and makes colorants for plastics.
Ferro said that as a result of the pending transaction, it will not hold its first-quarter earnings teleconference that had been scheduled for May 11. In the release, it said sales were $288.4 million in the first quarter, up 14 percent from the same period a year ago.
Ferro has about 3,700 employees worldwide. It reported 2020 sales of $959 million.
Ferro used to have a large plastics unit itself, making polypropylene compounds, but Ferro sold that business to A. Schulman in 2014.