Focus moving to specialty chemicals
“America’s got a choice to make. We can do nothing ... Or we can do what we’ve always done best. We pull together, we fight back and we win.” Barack Obama, president
Baton Rouge specialty chemicals maker Albemarle Corp. is selling its antioxidants, Ibuprofen and propofol businesses and assets to privately held SI Group, of New York.
The deal includes manufacturing sites in Orangeburg, S.C., and Jinshan, China, and Albemarle’s antioxidant product lines. Certain applications and technical support capabilities in Baton Rouge and Shanghai, China, are also included.
Terms of the transaction were not disclosed Wednesday.
“It’s the largest deal in SI Group’s history,” said Frank Bozich, the firm’s president and chief executive officer, in a written statement.
“The company looks forward to welcoming more than 500 employees and two new manufacturing sites to the SI Group family … upon closing of the acquisition,” SI Group officials said on the firm’s website Wednesday.
The announcement in Baton Rouge coincided with Albemarle’s report of $56.6 million, or 71 cents per share, in first-quarter earnings on net sales of $656.7 million. Its earnings a year ago were $84 million, or 94 cents per share, on revenue of $641.6 million.
The firm recorded a market capitalization of $5.27 billion, and its stock closed Wednesday at $66.28, up 66 cents.
“With this transaction, we are placing the antioxidants, Ibuprofen and related businesses in the hands of a company with a long history and a proven record of successful integrations and growth,” said Luke Kissam, Albemarle’s president and CEO.
Kissam said the transaction is part of a previously announced realignment of the company to focus on growing its core specialty chemicals businesses.
Announcement of the planned sale included the reference to provision of technical support capabilities at Albemarle’s Baton Rouge plant to SI Group.
Ashley E. Mendoza, Albemarle’s communications director, emphasized the Baton Rouge plant is not being sold to SI Group.
SI may operate a small portion of the plant’s assets “during a short transition period, but ultimately, (those) assets will move out of Baton Rouge,” Mendoza said.
Mendoza also emphasized Albemarle continues to manufacture pharmaceuticals and is only selling its Ibuprofen and propofol businesses. Propofol is a powerful anesthetic intended for use in surgery and some medical exams.
Other Albemarle pharmaceutical products are manufactured in South Haven, Mich., for use in blood pressure medicines, cough supressants, sleep aids, antihistamines, topical and local anesthetics and a variety of other products, Mendoza noted.
From New York, SI Group officials said the pending deal expands its antioxidants business and will position the company as one of the top three global suppliers of ibuprofen, an ingredient in such pain relievers as Advil, Motrin and Midol.
“This sale represents the optimal choice to maximize value for our shareholders while positioning these businesses to extend their track record of industry leadership and success going forward,” Kissam said of the sale.
The sale is subject to customary closing conditions and is expected to close later in 2014.
Bank of America Merrill Lynch is acting as exclusive financial adviser to Albemarle in the transaction.
Founded in 1906 and headquartered in Schenectady, N.Y., SI Group is a family-owned company with more than 2,200 employees at facilities in the U.S. and nine other countries — Brazil, China, United Kingdom, France, India, South Korea, Singapore, South Africa and Switzerland.
Albemarle develops, manufactures and markets highly-engineered specialty chemicals for consumer electronics, petroleum refining, utilities, packaging, construction, automotive/transportation, pharmaceuticals, crop protection, food-safety and custom chemistry services. The company is also advancing its eco-practices and solutions in two global business units: performance chemicals and catalyst solutions. Albemarle employs about 3,900 people and serves customers in about 100 countries.