Rockwood Closes Clay-based Additives Sale - Analyst Blog


Rockwood Holding Inc. ( ROC ) has completed the sale of Clay-based Additives, a part of its Performance Additives division, to Germany's Altana Group. Rockwood received net cash proceeds of over $600 million (after all transaction adjustments, fees and taxes) from the $635 million transaction. The deal was announced in Jul 2013. Lazard Ltd. ( LAZ ) acted as Rockwood's financial advisor for the deal.

The clay based additives business develops and manufactures specialty rheology modifiers and additives. The business is one of the world's leading suppliers of rheology additives that optimize the flow characteristics of various materials. Rheology additives are used in coatings, construction materials, and personal care products and are also used for a variety of applications. It ensures that coatings have the right viscosity and can be applied without forming droplets or bubbles.

The clay-based additives business is a relatively small business of Rockwood and accounted for only 5% of its annual revenues in 2012. The business had net sales of $191.4 million for the last year. The divestment of this business was Rockwood's long term business strategy to maximize shareholder value.

On the other hand, the acquisition is accretive to Altana as it not only opens up new growth opportunities for the company but also emphasizes its strategic focus on profitable growth. Altana develops and produces high-quality, innovative products in the specialty chemicals business, matching specialty products for coating manufacturers, paint and plastics processors, the printing and cosmetic industries, and the electrical and electronics industry.

Rockwood is a leading global specialty chemicals and advanced materials company. Recently, the company announced the divestiture of its Titanium Dioxide (TiO2) Pigments and four other non-strategic businesses to Huntsman Corporation ( HUN ).

Rockwood currently holds a Zacks Rank #5 (Strong Sell). Another company in the specialty chemical space with favorable Zacks Rank is Ferro Corp. ( FOE ) with a Zacks Rank #1 (Strong Buy).

FERRO CORP (FOE): Free Stock Analysis Report

HUNTSMAN CORP (HUN): Free Stock Analysis Report

LAZARD LTD (LAZ): Free Stock Analysis Report

ROCKWOOD HLDGS (ROC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: FOE , HUN , LAZ , ROC

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