Specialty chemicals and advanced materials company
Rockwood Holdings, Inc.
) has agreed to divest its advanced ceramics business CeramTec to
private equity firm Cinven for €1.49 billion (roughly $2
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Germany-based CeramTec makes high performance advanced ceramics
materials and products for medical, electronics, industrial and
automotive markets with 18 facilities globally. The entity has
strong foothold in a number of niche markets such as medical
products, cutting tools and mechanical applications.
The transaction, which is subject to appropriate regulatory
clearances, is expected to consummate during third-quarter 2013.
Cinven has secured fully committed financing for the deal.
The move is in line with Rockwood's goal to become a more focused
specialty chemical company. The company plans to use the net
proceeds from the sale to cut debt, return capital to
shareholders and re-invest in core businesses.
Rockwood, in April, posted its first-quarter 2013 results. Its
profit, as reported, slid 75% year over year to $18.9 million or
24 cents a share. The bottom line was hurt by weak results from
Titanium Dioxide (TiO2) Pigments and Performance Additives units.
Adjusted earnings of 68 cents per share beat the Zacks Consensus
Estimate by a penny.
Revenues rose 2.7% year over year to $934.6 million in the
quarter, surpassing the Zacks Consensus Estimate of $901 million.
Revenues from the Advanced Ceramics division fell 1.2% to roughly
$143 million on lower volumes in most applications.
Rockwood expects all of its businesses, except TiO2 Pigments, to
improve year over year in the remainder of 2013. The TiO2
business is expected to continue its weak performance in the
second quarter before it turns profitable in the second half. The
Performance Additives segment is expected to gain momentum on
improving U.S. remodeling and construction activities.
Rockwood is focusing on optimizing free cash flows and
implementing appropriate capital allocation strategies through
dividends and share repurchases and reinvestment in key
businesses in 2013. Some of its growth projects include the
expansion of the Chilean project for increasing lithium carbonate
Rockwood currently holds a Zacks Rank #3 (Hold).
Other companies in the specialty chemical space that are worth
American Vanguard Corp.
OM Group Inc.
). While American Vanguard and OM Group retains a Zacks Rank #1
(Strong Buy), Ferro holds a Zacks Rank #2 (Buy).