US firm Platform Specialty Products to acquire UK’s Alent Plc for around £1.35 billion
13 Jul 2015
US chemicals maker Platform Specialty Products Corp said it would acquire UK's Alent Plc for around £1.35 billion in cash as it seeks to expand its portfolio and save costs. The news sent shares of Alent to their highest on record.
The UK chemicals maker's shares shot 45 per cent to an all-time high on the London Stock Exchange, making it the top gainer on the FTSE-250 Midcap Index.
The 503-pence-per-share offer from Platform Specialty comes at a 49-per cent premium to Alent's closing price on Friday. Including debt, the deal is worth $2.3 billion, according to the companies.
The deal, the company's eighth in the last three years, would help the combined entity save about $50 million in costs annually before tax. Platform's most recent acquisition was OM Group Inc's industrial chemicals unit in June.
Platform plans to integrate Alent into its performance applications unit, MacDermid, which competes with Alent with chemicals used in the electronics and automotive industries.
The deal, which had been endorsed by Alent's board and its largest shareholder Cevian Capital, included an option for Alent shareholders to receive 0.31523 Platform shares for each Alent share instead of cash.
According to commentators, the takeover of Alent had become inevitable after activist shareholder Cevian Capital pushed for it to be carved out from Cookson Group Plc in 2012, creating a niche business at a time of consolidation in the industry.
Platform was looking to net annual pretax cost savings of at least $50 million as it integrated the business with MacDermid, purchased in 2013 for $1.8 billion.
''It's a full price, Platform were keen,'' Alent chief executive officer Andrew Heath, who joined five months ago from Rolls-Royce Holdings Plc, told Bloomberg in a phone interview.
Platform, seeing increased profits from demand for increasingly compact technology to fit in mobile phones and the addition of more electronics such as sensors in cars, was paying 13.9 times Alent's earnings before interest, taxes, depreciation and amortisation on an enterprise value basis, the highest multiple ever paid for a UK specialty chemical company, according to Heath.
The purchase, the latest deal in the electronic-chemical industry, follows Merck KGaA's purchase of AZ Electronic Materials in 2013 for $2.8 billion and Entegris Inc's takeover of ATMI Inc for $952 million.