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Germany's Lanxess $LXS to Acquire Chempura $CHMT Flame Retardant for $2.7B

Germany's Lanxess $LXS to Acquire Chempura $CHMT Flame Retardant for $2.7B

In April, Lanxess agreed to acquire the Clean and Disinfect business of US-based chemical company Chemours (NYSE: CC), for $230 million in cash. Chemours was created in 2015 as a spinoff from the DuPont (NYSE: DD) Performance Chemicals businesses. Chemtura has 20 sites in 11 countries and approximately 2,500 employees worldwide. The company reported sales of $1.7 billion in 2015, with 45 percent of its revenue generated in North America. In addition to additives, Chemtura’s portfolio includes urethanes and organometallics. “With this acquisition, we are forming a champion in the field of additives and are strengthening our already profitable portfolio,” said Matthias Zachert, chairman of Lanxess. “Through the acquisition, we are further implementing our strategy to become a more resilient and profitable chemical company. We are significantly building on our competitive positioning in medium-sized markets and increasing our presence in North America. Lanxess is taking a next and major step forward on its growth path.” Lanxess, based in Stuttgart, Germany, reported sales of €7.9 billion in 2015, with 16,700 employees in 29 countries, and 55 production sites worldwide. The company’s core business is the development, manufacturing and marketing of chemical intermediates, specialty chemicals and plastics. Through Arlanxeo, a joint venture with Saudi Aramco, Lanxess is also a leading supplier of synthetic rubber. Lanxess was spun off by Bayer AG in 2005. “The transaction provides premium value to our shareholders and benefits our customers and employees by making Chemtura part of a much larger, stronger global enterprise with the resources to fully support a more diverse suite of specialty chemicals products and services,” said Craig A. Rogerson, president, chief executive and chairman of Chemtura. The acquisition will be financed through senior and hybrid bonds, as well as from existing liquidity. The deal is expected to close around mid-2017, subject to approval by Chemtura shareholders, regulatory approvals and other customary closing conditions. Morgan Stanley & Co.  acted as financial advisor and Davis Polk & Wardwell LLP acted as legal advisor to Chemtura.]]>

Ferro $FOE Near Final Exit, Drawing Hurried PE Bids Under FrontFour Pressure

Ferro $FOE Near Final Exit, Drawing Hurried PE Bids Under FrontFour Pressure

Bloomberg reporter Kiel Porter. On May 9, Ferro said that “its Board of Directors is exploring possible strategic alternatives,” and that the company “has retained Lazard Frères & Co. as its financial advisor.” The move was in response to pressure from activist investor FrontFour Capital Group LLC, a Greenwich, Connecticut-based hedge fund which holds a stake of over 3% in Ferro. On March 14, FrontFour sent a letter to the company’s chairman Peter T. Thomas, urging its board of directors “to pursue strategic alternatives, including a potential sale of the company.” “Given Ferro’s significant operational improvement, strong market share positions, robust free cash flow generation and deep acquisition pipeline, we believe that Ferro would receive strong interest from both strategic and private equity buyers, at a price reflecting a significant premium to Ferro’s current trading levels,” Frontfour added. Co-founders David A Lorber and Zachary R George, alongside partner Stephen E Loukas, co-manage the firm’s flagship fund, FrontFour Capital Partners LP.

“You work for us,” FrontFour hedge fund executives are known to remind their target companies’ senior management, after becoming significant shareholders.
On March 5, 2016, in a rare public appearance, FrontFour’s Zach George delivered the keynote address at an investment summit hosted by three of Canada’s leading independent financial publishers: Oil and Gas Investments Bulletin, HRA Journal and CEO.CA. FrontFour became a Ferro shareholder in 2012 and embarked on a proxy contest in early 2013, which it subsequently settled in exchange for nominations on the company’s board of directors, Reuters said. Ferro is a leading global functional coatings and color solutions company that supplies technology-based performance materials, including glass-based coatings, pigments and colors, and polishing materials. The company’s products are sold into the building and construction, automotive, appliances, electronics, household furnishings, and industrial products markets. Ferro Corp. was founded in 1919 and is headquartered in Mayfield Heights, Ohio. The company has approximately 4,860 employees globally and reported 2015 sales of $1.1 billion. Photo: Hedge fund activist investor Zach George of FrontFour Capital, delivering the keynote address at the Subscriber Investment Summit on March 5, 2016 at the Hilton Toronto. (Calgary Herald / Colleen De Neve)]]>

Westlake Chemical $WLK to Acquire Axiall $AXLL in $3.8B Deal

Westlake Chemical $WLK to Acquire Axiall $AXLL in $3.8B Deal

Axiall agreed to sell its window and door profiles business to private equity firm OpenGate Capital. Axiall had also agreed to sell certain assets of its compound additives business, known as Solucor, and its manufacturing facility located in Bradford, Ontario, to Galata Chemicals of Southbury, Connecticut. “This transaction aligns two remarkable companies, creates a company with greater financial and operational flexibility and accelerates our growth strategy,” said Albert Chao, Westlake’s president and CEO. “We are pleased to have reached this agreement with Westlake, which provides our stockholders with immediate recognition of the long-term value of our company, underscoring our Board’s commitment to maximizing stockholder value,” said Timothy Mann, Jr., Axiall’s president and CEO. The deal has been unanimously approved by the boards of directors of both companies and is expected to close by the fourth quarter of 2016, subject to the approval of Axiall’s stockholders and customary closing conditions. Westlake has received commitments from its banks to finance the transaction. Deutsche Bank and Goldman, Sachs & Co. are acting as financial advisors and Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel to Westlake. Morgan Stanley & Co. LLC and Barclays are acting as financial advisors and Jones Day is acting as legal counsel to Axiall. Weil, Gotshal & Manges LLP is acting as legal counsel to the Axiall board of directors. Westlake Chemical Corp. is an international manufacturer and supplier of petrochemicals, polymers and building products with headquarters in Houston, Texas. Westlake’s range of products includes: ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC suspension and specialty resins and PVC building products including pipe and specialty components, windows, fence, deck and film. The company was founded in 1986. Axiall Corp. is a leading integrated chemicals and building products company. Headquartered in Atlanta, Georgia, Axiall has manufacturing facilities located throughout North America and Asia. The company was founded in 1984.]]>