W. R. Grace & Co. has agreed to be acquired for $4.6 billion by a New York building materials company in an all-cash deal that also would fold in a North Carolina-based chemical manufacturer that Grace planned to acquire.
The Columbia-based specialty chemical giant said Monday that Standard Industries Holdings Inc., the parent of Standard Industries, will acquire all outstanding shares of Grace common stock for $70 per share. That price represents a 59% premium over Grace’s closing price of $44.05 on Nov. 6, the last trading day before 40 North Management LLC, the investment arm Standard Industries, proposed acquiring Grace.
40 North is Columbia-based Grace’s largest shareholder. Grace’s board of directors has approved the acquisition, which is subject to a shareholder vote and regulatory approvals.
Once the deal closes, Grace would become privately held and its common stock will no longer be listed on the New York Stock Exchange. It would operate as a standalone company within the portfolio of Standard Industries Holdings, which businesses GAF, BMI Group, Schiedel, Siplast, SGI and GAF Energy.
Grace rejected an initial unsolicited bid of $60 per share from 40 North in November. The investment firm increased its offer in January to $65 per share, or $4.3 billion and Grace agreed to talks. Earlier this month, the investment firm raised its offer again to $4.6 billion, or $70 per share.
The agreement announced Monday also would include a division of a Charlotte, North Carolina-based chemical manufacturer, Grace said. Grace had said in February it planned to expand its pharmaceutical manufacturing with a $570 million acquisition of Fine Chemistry Services, a division of Albemarle Corp.
40 North also will assume W.R. Grace’s debt, bringing the deal’s total value to $7 billion.
“We are thrilled to welcome Grace to the Standard Industries family and look forward to working with its exceptional team to usher in a new era of innovation and growth for Grace, its employees, customers and the communities in which it operates,” said David Millstone and David Winter, co-CEOs of Standard Industries Holdings, in a joint statement Monday.
Hudson La Force, Grace’s president and CEO, said the deal with Standard is the “best path forward” for the company and its shareholders
“Standard’s $7 billion investment in Grace reflects their confidence in the significant growth opportunities we have and enables our shareholders to realize immediate value at a significant cash premium,” La Force said in an announcement.
Standard’s deal to acquire Grace is expected to close in the fourth quarter.
The transaction is not contingent upon financing, with commitments already made by J.P. Morgan Chase, BNP Paribas, CitiBank and Deutsche Bank and investment funds affiliated with Apollo Global Management as capital partner.
40 North, a holder of 14.9% of shares of Grace common stock, has entered into a voting agreement with Grace in which it has agreed to vote its shares of Grace common stock in favor of the deal.
Grace said it will suspend payment of a dividend going forward. It will release first quarter earnings on May 6 but will not host an earnings call.
Grace’s stock were up $4.13 each to $68.29 a share in Monday morning trading.
