Shares of fluid technology company Lubrizol ( LZ) were moving higher in Friday trading after the company said it will buy specialty chemical company Noveon in a $1.84 billion deal.

The transaction includes a cash payment of $920 million for equity and the assumption of Noveon's net debt, which was $920 million as of Dec. 31, 2003. Lubrizol has secured a bridge financing facility from Citicorp North America to fund the transaction. The company plans to refinance the funding after the transaction closes.

Excluding transaction costs, Lubrizol expects the acquisition to immediately add to cash flow, while boosting earnings per share within 12 months of the closing date. Cleveland-based Noveon had revenue of $1.2 billion last year.

Lubrizol said the acquisition, which is expected to close in the next three months, will expand its application base within the personal-care and specialty-coatings markets, while resulting in $40 million in cost savings over the next three years. Lubrizol shares were lately up 63 cents, or 2%, at $32.53.

"Our business will be better balanced following the acquisition," Lubrizol said in a press release. "Approximately one-half of our company will consist of Lubrizol's traditional business, which concentrates on lubricant additives for the transportation market and is a strong, stable and cash-generating business. The other half will concentrate on the higher- growth areas of industrial and consumer-related products."

Lubrizol also said it now expects first-quarter earnings of 70 cents to 72 cents a share, up from a previous guidance of 53 cents to 58 cents a share. Analysts had expected 53 cents a share, on average. The expected earnings include a currency forward contract gain of 8 cents a share from acquiring the additives business of Avecia, completed on Jan. 30. Stronger volume and product mix in lubricant additives also helped the quarter.

Lubrizol will release first-quarter earnings on April 23.

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