This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Japan's Toray Industries Buys Zoltek for $584M

NEW YORK ( The Deal) -- Japanese carbon fiber producer Toray Industries on Friday, Sept. 27, agreed to buy U.S. rival Zoltek Companies (ZOLT) for $584 million to grab more of the market as demand increases.

Tokyo-based Toray said it would pay $16.75 per share for Zoltek.

Although the deal is a 2% premium to the stock's Wednesday close, it's a 10% discount on the Zoltek's Thursday close following a report of the impending deal.

"As one of its strategically expanding businesses, Toray has promoted business expansion of carbon fiber composite materials business by proactively allocating business resources," the buyer said.

Zoltek put itself on the market in April at the behest of major shareholder Quinpario Partners. The fund, which is led by Jeffry Quinn and owns 11% of Zoltek, wanted the company to either sell itself, recapitalize or go shopping. Zoltek responded by tapping JPMorgan Securitiesto consider its options.

The acquisition will allow Toray to expand into the market for large tow carbon fibers, which have far more fibers than regular tow products.

Toray said it expects the market for large tow carbon fiber to expand about 15% annually as demand for high-performance, low-weight equipment such as wind turbines booms. The market for regular tow is expected to remain flat.

Zoltek, based in St. Louis, saw revenue fall by about a third in the third quarter to $30.3 million as demand for wind energy products softened. It slipped to a loss of $900,000 on the weak sales as well as a loss on foreign currencies, compared with profit of $3.3 million in the third quarter of 2012.

"This transaction represents a great result for our shareholders, customers and employees. Toray provides unique opportunities to drive the continued growth of our commercial carbon fibers business well into the future," said Zoltek CEO and founder Zsolt Rumy in a statement. Zoltek said its board recommends shareholders accept the agreement. CEO Rumy pledged his 18% stake to the deal, which is expected to close late this year or in early 2014.

In addition to JPMorgan, Zoltek turned to Thompson Coburn LLP for counsel.

Toray received financial advice from GCA Savvian Advisors and counsel from Skadden, Arps, Slate, Meagher & Flom.

Written by Andrew Bulkeley

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ZOLT $0.00 0.00%
AAPL $93.64 0.00%
FB $118.57 0.00%
GOOG $698.21 0.00%
TSLA $241.80 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs