SAFC Hitech Ltd. a wholly owned subsidiary of
), announced that it has agreed to create a 50:50 joint venture
(JV) with Korean-based Soulbrain Co. Ltd. The joint venture,
known as Soulbrain Sigma-Aldrich Ltd, is expected to be finalized
in the first quarter of 2013.
Through the JV, Sigma-Aldrich seeks to foray into the lucrative
Korean market and focus on developing and commercializing
advanced metal organic precursor technologies that are used in
the semiconductor and LED markets.
Per the JV agreement, Soulbrain will provide certain electronic
material product know-how, intellectual property (IP), and
development personnel to the venture. SAFC Hitech Ltd., on the
other hand, will provide the manufacturing and product competency
and IP for metal organic compounds.
All the products manufactured or acquired by the newly formed JV
will be distributed exclusively by Soulbrain in the Korean
market. However, SAFC Hitech Ltd or its affiliates will
distribute the JV products outside Korea.
Soulbrain is a publicly traded specialty chemical company
headquartered in Pangyo, Korea and serves the flat panel display,
semiconductor and electronic materials market. By collaborating
with Soulbrain, Sigma-Aldrich will expand its presence in the
Asia Pacific region. Sigma-Aldrich will also be able to cater to
a bigger customer base through Soulbrain's established technical
competencies, infrastructure and customer relationships.
Sigma-Aldrich is a leading life science and advanced
technology company. Last month, the company also signed an
agreement with Seoul, South Korea-based CrystalGenomics to
develop active pharmaceutical ingredients (API) for
next-generation non-steroidal anti-inflammatory drugs
Sigma-Aldrich released its third quarter 2012 results in
October. The company posted adjusted earnings (excluding
restructuring charges) of 94 cents per share for the quarter,
below the year-ago earnings of 96 cents. The results were in line
with the Zacks Consensus Estimate.
Profit, as reported, fell roughly 4% year over year to $112
million or 92 cents per share in the quarter from $117 million or
95 cents a year ago. Unfavorable currency reduced earnings per
share by 11 cents.
Revenues edged up 2% year over year to $639 million in the
quarter, but trailed the Zacks Consensus Estimate of $661
million. Acquisitions added 6% to the revenue growth while
foreign exchange swings had a negative impact of 6%.
Sigma-Aldrich expects organic growth to be 3% in 2012, within
its earlier low-to-mid single digits growth expectation. The
acquisitions of BioReliance and Research Organics are expected to
boost sales by 6%. However, unfavorable currency is expected to
reduce sales by 3%.
BAYER A G -ADR (BAYRY): Free Stock Analysis
SIGMA ALDRICH (SIAL): Free Stock Analysis
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Sigma-Aldrich, a close peer of
), maintains a Zacks #3 Rank, which translates into a short-term
(1 to 3 months) Hold rating. We currently have a long-term (more
than 6 months) Neutral recommendation on the shares of the