Industrial conglomerate Standard Industries Holdings Inc. has acquired specialty chemicals maker W.R. Grace & Co. in a $7 billion all-cash deal.
Plastics-related products made by Columbia, Md.-based Grace include polyolefin catalysts for the production of polypropylene and polyethylene resins as well as surface modifiers for thin polymer films.
Grace also licenses Unipol-brand gas phase PP process technology for production of a broad range of PP resins. Grace acquired the Unipol PP technology from Dow for $500 million in 2013. Unipol originally was developed by Union Carbide Corp.
Under terms of the agreement, New York-based Standard will acquire all of the outstanding shares of Grace common stock for $70 per share in cash. That price represents a premium of almost 60 percent over Grace's closing stock price of $44.05 on Nov. 6. That was the last trading day prior to the announcement of 40 North Management LLC's initial proposal to acquire Grace.
40 North, a unit of Standard, has been a longtime Grace shareholder. The Grace board of directors unanimously approved the transaction.
In an April 26 news release, Standard co-CEOs David Millstone and David Winter said they "look forward to working with [Grace's] exceptional team to usher in a new era of innovation and growth."
Grace President and CEO Hudson La Force added that "we are confident that our agreement with Standard … is the best path forward for Grace and our shareholders."
"Standard's $7 billion investment in Grace reflects their confidence in the significant growth opportunities we have and enables our shareholders to realize immediate value at a significant cash premium," he said.
La Force added that the deal, expected to close in the fourth quarter, "is a testament to the strengths of our talented employees, industry-leading technologies and deep global customer relationships."
Grace posted sales of $1.73 billion in 2020. The firm employs 4,000 worldwide and traces its history to 1832, when William Davidson founded Davison, Kettlewell & Co. — a grinder of bones and oyster shells — in Baltimore.
Standard is the parent company of Standard Industries, a privately held global industrial firm that employs more than 15,000 in more than 80 countries. The firm makes building materials, solar products and many other items, operating as GAF, Siplast and other operating companies.
After the deal is completed, Grace will act as a standalone company within the Standard portfolio.