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Chemical Finance Digest, May 22
11:46 AM MDT | May 22, 2012 | By VINCENT VALK
Topping the headlines last week, Cytec’s transformation strategy continues apace. The company has launched a formal sale process for its coatings resins business, which could easily fetch a billion-dollar plus valuation, shortly after selling its pressure sensitive adhesives (PSA) product line to Henkel for $105 million.
In other M&A news, DSM has acquired Ocean Nutrition Canada for $528 million. The deal complements DSM’s nutritional lipids products, the company says. Meanwhile, chemical M&A value is on the decline, according to new data from investment bank Young & Partners.
PetroLogistics has raised $595 million from its recently completed IPO.
First-quarter earnings mostly declined at European chemical companies, as the sovereign debt crisis dragged down the European economy.
Univar and Momentive have both announced big new debt issues in the past week. Univar’s $750 million issue will be used along with a new term loan to refinance existing debt and pay a dividend to the company’s private equity owners. The size of Momentive’s issuance, originally intended to be $450 million, fell to $250 million due to lack of investor interest. Nevertheless, S&P has rated the debt ‘B+’ and removed the company from its watch list.
U.S. industrial production rose 1.1% during April, which manufacturing output up 0.6%. Prior increases were revised downwards, with March seeing an output decline. While the numbers are “all right,” says IHS Global Insight economist Michael Montgomery, “the manufacturing sector is not likely to outperform GDP growth in the second period as it did in the first.”