PHILADELPHIA _ Chemtura Corp. has agreed to be acquired by chemical-maker Lanxess AG for $33.50 a share, or $2.1 billion (2.4 billion euros), cash. The chemical manufacturing group has been based in Philadelphia since a team of bosses headed by Hercules Inc. veteran Craig Rogerson and turnaround specialist Ray Dombrowski took it out of bankruptcy and sold shares to the public in 2010. Lanxess, based in Stuttgart, Germany, was spun off by Germany's Bayer in 2005.
The sale price is the most Chemtura has been worth since it went public. The company debuted at $15, sank below $10 in 2011, then rose as it returned to profitability since then. The price is a 19 percent premium to Chemtura's closing price last week, and a little more than $1 above its previous high last year. The stock's largest owner is activist investor Mario Gabelli's Gamco mutual fund company.
The company has been looking for a buyer since last year, CEO and chairman Rogerson said in a statement Monday. Chemtura plants make petroleum-lubricant additives and flame retardants, among other products.
The company, formed in the merger of Great Lakes Chemical Co. and Crompton Corp., lost money every year from 2007-10, then made money each year since, while selling off divisions and cutting sales to $1.7 billion, less than half its pre-bankruptcy total.
In a conference call with analysts last night, Chemtura executive vice president Stephen C. Forsyth, another early member of the turnaround team, reminded shareholders that the company has spent $1 billion in proceeds from asset sales buying back shares. Chemtura sold pesticides, consumer, bio and antioxidant businesses, raising more than $1.5 billion, since 2010. Forsyth said the remaining businesses were poised to grow profits by 20 percent a year.
Rogerson says Chemtura's remaining businesses will now benefit as part of Lanxess' "larger, stronger, global enterprise with the resources to fully support" the company's "specialty chemicals products and services."
Indeed, the deal makes Lanxess "a major global player" in making and selling petroleum additives, while adding urethane and organometallics production to Lanxess' product lineup, Matthias Zachert, the buyer's CEO and chairman, said in his statement. Rogerson said the Lanxess offer was an endorsement of Chemtura's approach.
Lanxess will use cash and borrowed money to pay Chemtura shareholders. The companies hope to close the deal in mid-2017, if Chemtura investors and regulators approve.
The bankruptcy, reorganization and 2010 followed a failed intervention by New York billionaire investor Nelson Peltz, who later led the investor insurgency that helped force DuPont Co. into a merger with Dow Chemical in hopes of cutting costs and boosting investor profits. Officials at Peltz's firm, Trian Partners, didn't return a call seeking comment.
