Cytec, a speciality chemicals and materials company headquartered in Woodland Park, New Jersey, USA, says that Umeco's board of directors intends to unanimously recommend the transaction to Umeco shareholders.
The acquisition of Umeco will allow Cytec to further enhance its position in advanced composite materials and expand its presence in aerospace and industrial applications, areas where Cytec sees excellent opportunities for growth.
|This transaction is consistent with our strategy to focus on profitable and growing segments where we can leverage our technological leadership. The acquisition of 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.|
|Shane Fleming, Chairman, President and CEO, Cytec|
"We are excited about combining Umeco with Cytec's existing advanced composites businesses," says Shane Fleming, Chairman, President and CEO, Cytec.
"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. In addition, the acquisition also enhances our near-term composite capacity while we complete capital investments over the next few years."
The acquisition will extend Cytec's portfolio of products, add new revenue streams, and enhance production capacity.
"This transaction is an important step forward as we position Cytec with an industry-leading portfolio of growth businesses within our Engineered Materials and In Process Separation growth platforms," adds Fleming. "We will continue to build on our recent success in capturing new business and penetrating the market with our advanced technology solutions as we seek to deliver enhanced value to our stakeholders."
Founded in 1917, Umeco is an international provider of advanced composite materials, 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 recently rebranded its companies – including Advanced Composites Group, GRPMS, JD Lincoln, Richmond Aerovac and GRPMS – under the Umeco name.
Umeco reported revenues of £207 million in the financial year ended 31 March 2011.
"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," says Neil Johnson, Non-executive Chairman of Umeco.
"Further, the acquisition will expand and enhance Cytec's product and service offering with the addition of the Process Materials business."
Aerospace and non-aerospace
Upon completion of the transaction, Cytec will organise 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 non-aerospace growth markets. Cytec's Engineered Materials (CEM) segment will continue to focus on aerospace growth opportunities.
Cytec Engineered Materials provides advanced materials for demanding environments.Its product portfolio includes:
Cytec does not expect to see "significant workforce reductions" resulting from this transaction.
Both companies' boards of directors have unanimously approved the acquisition. The transaction is expected to close in the third quarter of 2012.