Cytec Industries Inc. (Woodland Park, N.J.) on April 12 announced its firm intention to acquire all of the outstanding shares of Umeco plc (Heanor, U.K.), in an all-cash transaction valued at approximately $439 million (£274.3 million). The board of directors of Umeco intends to unanimously recommend the transaction to Umeco shareholders.
The acquisition of Umeco will enable Cytec to expand its presence in both aerospace and industrial applications, an area where Cytec sees excellent opportunities for growth.
Founded in 1917, Umeco plc is an international supplier, through subsidiaries that include the Advanced Composites Group (Heanor, U.K. and Tulsa, Okla.), primarily to the aerospace and defense industries, and industrial sectors, such as automotive. Umeco’s Structural Materials business focuses on the development, manufacture and supply of advanced composite materials, and its Process Materials business focuses on the development, manufacture and supply of processing materials for the composites industry. Umeco reported revenues of £207 million ($332 million) in its most recently reported financial year, which ended March 31, 2011.
“We are excited about combining Umeco with Cytec’s existing advanced composites businesses. It greatly improves our composite presence in the industrial sector, where we see tremendous potential for significant value creation in applications like automotive as customers seek to reduce weight and CO2 emissions,” said Shane Fleming, Cytec’s chairman, president and CEO. “This transaction is consistent with our strategy to focus on profitable and growing segments where we can leverage our technological leadership. Umeco will provide us with additional scale, a dedicated supply chain well-tailored to the needs of the high performance industrial sector, and application development capabilities that will help us respond quickly and effectively to customers’ needs.”
Neil Johnson, nonexecutive chairman of Umeco, commented, “Umeco is an excellent fit with Cytec, which can draw on Umeco’s technological capabilities, infrastructure and existing customer base as it continues to build on its industry-leading expertise in advanced composite materials.”
Upon completion of the transaction, Cytec will organize the combined assets in two separate reporting segments. Umeco’s advanced materials business will be integrated into a newly created High Performance Industrial Materials (HPIM) segment that will focus on nonaerospace growth markets. Cytec’s Engineered Materials (CEM, Tempe Ariz.) segment will continue to focus on aerospace opportunities. Cytec anticipates no significant workforce reductions after the transaction, which is intended to accelerate growth in industrial markets and, thereby, create more opportunities for growth.