A Schulman to buy Ferro specialty plastics assets
A. Schulman has agreed to purchase a majority of the assets of the specialty plastics business of Ferro Corp. for $91 million in cash, the companies announced on Wednesday.
The purchase agreement includes four facilities located in the US as well as operations in Spain.
Subject to the satisfaction of customary closing conditions and regulatory approvals, the transaction is anticipated to close during the fourth quarter of A. Schulman's current fiscal year ending August 31, 2014.
Excluded from the transaction are Ferro's plastics business and operations in Edison, New Jersey, and Carabobo, Venezuela.
The acquisition is expected to be accretive to adjusted earnings per share, and Schulman anticipates achieving approximately $5.5 million in synergies within 12 to 18 months following the close of the transaction, driven primarily by sourcing activities and plant efficiency actions.
The assets included in the pending transaction achieved sales of $154 million in 2013, with approximately two-thirds of these revenues generated in the US. As a result, this acquisition is expected to deliver important geographic diversification benefits to A. Schulman.
The specialty plastics segment is a global supplier of custom engineered plastic compounds, colorants, and liquid coatings, primarily focused on thermoset plastic technology. The business offers a broad portfolio of proprietary products and recognized brand names serving a wide range of end markets including packaging, transportation, construction, appliances and agriculture.
"We continue to strengthen our US operations and expand our global capabilities in engineered plastics, masterbatch solutions and custom performance colors, which represent outstanding profitable growth opportunities and are integral to our value creation strategy," said Bernard Rzepka, chief operating officer of A Schulman.
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