Specialty Chemicals Roundup, August 26-31
2:11 PM MDT | September 1, 2011 | By REBECCA COONS
Specialty chemicals have been relatively quiet, save a couple of small- to medium-sized acquisitions. DKSH (Zurich) has acquired specialty chemicals distributor Tiger Chemicals (Melbourne, Australia) to expand its market presence in Australia and gain market access to the market in New Zealand. The deal provides DKSH with access to several hundred customers and a sales team with more than 30 years of experience in specialty chemicals distribution. The newly acquired company will operate within DKSH’s Performance Materials business unit.
Eastman acquired Brazilian non-phthalate plasticizer firm Scandiflex do Brasil S.A. Indústrias Químicas (São Paulo). The deal is Eastman's third plasticizer acquisition in the last 16 months. Eastman, which recently told CW non-phthalate plasticizers are the fastest-growing product within its performance chemicals and intermediates business, plans to discontinue all phthalate plasticizer production by the end of the year.
Sika (Baar, Switzerland) agreed to acquire Colauto Adesivos e Massas (São Paulo, Brazil), a manufacturer of adhesives and sealants, as well as acoustic damping and structural reinforcement elements for the fast-growing automotive and transportation industry. Colauto is one of the leading suppliers of chemical process materials for the automotive industry in Latin America, and the company reported sales of SF40 million ($49 million) in 2010, and employs about 250 people, Sika says. Colauto operates a production site at São Paulo.
Financial terms were not disclosed for either acquisition.
Meanwhile, Solvay's previously announced bid to acquire Rhodia has been successful. French financial markets authority AMF (Paris) published today the results of Solvay's tender offer, which show that on August 24, the closing date of the offer, shares and voting rights in Rhodia equivalent to 94.25% of the total share capital and voting rights in Rhodia had been tendered.
Credit rating agencies Moody's (New York) and Standard & Poor's (S&P; New York) took divergent actions in response to Ashland's acquisition of International Specialty Products (ISP). Moody's reaffirmed Ashland's existing 'Ba1' rating, while S&P downgraded Ashland one notch, to 'BB' from 'BB+'. S&P's rating is now one notch lower than Moody's comparable rating.
Paints firm Jotun AS will rebuff a $933 million bid for majority control from industrial conglomerate Orkla (Oslo), according to Bloomberg (New York) eports. Orkla, which already holds a 38% stake in Jotun, says the paints and coatings is a sector well-aligned with its industrial strategy and that there are “good examples of synergies” between the two companies.
Omnova Solutions provided a post-earnings reminder that the second-half of 2011 is likely to be weaker than the first. The company lowered its full-year adjusted earnings estimate due to “a deceleration in the global economy in the third quarter and rapid escalation of raw material costs to unprecedented highs.” The company now expects earnings for its fiscal year ending November 30 to be 40 cts-44 cts/share, compared with its prior guidance of 60 cts/share. The company reported adjusted earnings of 88 cts/share in fiscal 2010. "The global economy has recently slowed and become more uncertain and, as a result, demand across many Omnova markets has weakened," says Kevin McMullen, chairman and CEO. "At the same time, despite the recent drop in oil prices, the costs for key raw materials such as butadiene and many acrylics have continued to rise to record levels." Omnova expects second-half performance chemicals volumes to be down 4%-5%, due primarily to weakness in the carpet and paper markets. Decorative products volumes are expected to be 10%-12% lower than year-ago levels due to weaker demand for coated fabrics. For full-year fiscal 2011, Omnova expects raw material inflation to be about $140 million, excluding the Eliokem business acquired late last year. A record increase in selling prices are not expected to recoup raw material costs, Omnova says.