Ferro has completed the sale of its pharmaceuticals business, Pfanstiehl Laboratories, to private equity firm Med Opportunity Partners (Greenwich, CT). Ferro will receive $16.9 million cash and an incentive payment of up to $8 million, payable over 2 years based on the unit's earnings performance. Ferro says it has also retained certain tax benefits with an estimated value of approximately $5 million. Ferro’s pharmaceuticals business posted sales of $24 million and generated a segment income of $2.4 million in 2012.
Ferro says the sale leaves its portfolio “more fully concentrated in our core technologies in coatings and color and glass science, polymer science, and organic synthesis.” The company, facing a hostile bid from A. Schulman announced on 4 March, completed the sale of its solar pastes business in February. Schulman announced last week that it has retained Moelis & Company (New York) to advise on the bid.
“Together with our previously announced initiatives to reduce costs by more than $50 million, the successful sale of our solar pastes assets, and the additional financial flexibility gained by amending our credit facility, today’s announcement reflects the board’s and management’s commitment to drive shareholder value from our performance materials and performance chemicals businesses,” says Peter Thomas, interim president and CEO of Ferro. “We will remain focused on improving return on invested capital and cash flow by streamlining operations, reducing operating costs, and pursuing select growth opportunities.”