Specialty chemicals and materials company
said Monday that it completed the first of three phases of the sale of its global water treatment chemicals and acrylamide product lines to
This phase includes the entire product lines with the exception of Cytec's Botlek manufacturing site in the Netherlands, which is expected to close in early 2007, and certain assets at various subsidiaries in Asia/Pacific and Latin America which are expected to close within the next six months. The timing of the flow of funds is about $208 million received today for this closing, an estimated $20 million upon the Botlek closing and an estimated $12 million upon completion of the transfer of the assets at the various subsidiaries for an estimated total of $240 million.
The estimated 2006 sales of the two product lines are about $300 million. Included in this phase of the transaction are all of the sales, marketing, manufacturing, R&D and technical services, personnel and four manufacturing sites, Mobile, Ala., Longview, Wash., Bradford, U.K., and the acrylamide manufacturing plant at Cytec's Fortier, La., facility which will be operated by Cytec personnel under a long term manufacturing agreement.
"Net after-tax proceeds from this transaction will be used to pay down debt and further improve our balance sheet. As a reminder, the net effect of this divestiture, excluding any anticipated gains on the actual closings, and giving effect to the use of net after-tax proceeds to pay down debt is expected to be about $0.04 dilutive and $0.15 dilutive to earnings per diluted share in 2006 and 2007, respectively. However, after taking into account the net effect of our previously announced restructuring actions in 2006, we expect the impact on 2007 earnings per share to be essentially neutral. We will now move forward with a keen concentration on our growth businesses," the West Paterson, N.J.-based company said.
The shares of the company were trading down 50 cents, or 1%, at $55.09 Monday.
This story was created through a joint venture between TheStreet.com and IRIS.