Solvay has entered into a definitive merger agreement with U.S.-based Cytec to acquire 100% of its share capital.
The total cash consideration will amount to US $5.5 billion, corresponding to an enterprise value of US $6.4 billion and representing a 2015 estimated EBITDA multiple of 14.7x and of 11.7x when considering synergies potential linked to the transaction. The transaction price per share represents a premium of 28.9% compared to the closing price of Cytec on 28th July 2015 and a premium of 26.9% compared to the volume-weighted average closing share price over the last three months. Cytec’s and Solvay’s boards of directors have unanimously recommended the transaction.
Headquartered in New Jersey with 4,600 employees across the globe, Cytec generated sales of US$ 2.0 billion in 2014. It sources almost half of its sales from North America, nearly a third from EMEA and the remainder from Asia-Pacific and Latin America.
Cytec is among the world leaders in composite materials and in mining chemicals. In the fast-growing composite materials sector, which represents two-thirds of its sales, its principal market is primary and secondary structures for aircraft. It is also developing new technological applications for composites in automotive. Cytec is the leader in tailored speciality chemical formulations to enhance mining separation processes.
The proposed acquisition of Cytec marks a major step-change in Solvay’s portfolio upgrade. It is a unique opportunity for Solvay to boost its customer offerings in light-weighting with advanced composite materials in aerospace and automotive, as well as to strengthen its know-how with activities in mining chemicals.