Cytec Industries, a specialty materials and technology company, has announced
the completion of its acquisition of UCB's Surface Specialties business. According
to the announcement, the transaction is valued at $1.797 billion of which $1.505
billion was paid in cash. The balance was paid in 5,772,857 shares of Cytec common
stock ($292 million at $50.55 per share). In addition, there is contingent consideration
up to a maximum of approximately $66 million, of which an approximate $27 million
was paid up front with the balance payable in 2006. The contingent consideration
is earned on a pro rata basis pending the achievement of certain operating results
by Surface Specialties in 2005, stated the announcement.
Currently, UCB owns approximately 12.5 percent of Cytec's outstanding shares
and has entered into a stockholders agreement that provides for UCB to reduce
its stake within five years.
In conjunction with the transaction, Cytec will divest Surface Specialties'
amino resin product line this year, and will use the proceeds to reduce debt.
In 2004 sales of Surface Specialties' amino resin product line were approximately
"With this acquisition, Cytec becomes one of the world's leading suppliers
of specialty chemicals to the coatings industry, and creates a combined Cytec
entity of approximately $3 billion based on 2004 pro forma revenues, excluding
Surface Specialties' amino resin products line," said David Lilley, Cytec
chairperson, president and chief executive officer. "This transaction complements
Cytec's existing product lines by significantly increasing [our] product offering
to the coatings industry
In addition, Lilley announced a redesigned organizational structure.
"Cytec will operate the acquired Surface Specialties business as a separate
segment, and will integrate the existing Coating and Performance Chemicals product
lines into this new segment, which will be headquartered in Brussels, Belgium,"
said Lilley. "Mr. Ben Van Assche, formerly director-general of Surface Specialties,
has been named president of Cytec Surface Specialties and will be elected an officer
of Cytec and a member of our executive committee."