The Deal: Rockwood Gains on Sale of Rheology Unit to Germany's Altana

NEW YORK ( TheStreet) - Germany's Altana AG, a specialty chemicals company owned by the country's wealthiest woman, Susanne Klatten, on Monday agreed to buy the rheology business of Rockwood Holdings ( ROC) as part of the company's efforts to narrow its focus.

Privately-held Altana of Wesel, Germany, said it would pay $635 million for the rheology business, which manufactures products that make chemicals flow more smoothly, has production sites in the U.K., the U.S. and Germany.

"The acquisition offers attractive growth potential," said Altana's Christoph Schlünken, president of its additives and instruments division, in a statement. "We can use our existing business structure to grow the acquired rheology business in Asia,"

In keeping the publicity-shy Klatten, Altana has made few major purchases since exiting pharmaceuticals in 2006 and aborting an attempt to snap-up all of Princeton, New Jersey-based Rockwood two years later. It sold its drugs business to what is now Denmark's Nycomed AS for $5.7 billion.

Klatten, a billionaire, is the daughter of Altana's founder and also owns 12.6% of Munich carmaker BMW AG.

Rockwood's rheology business had sales of $191 million last year and employs 340. It's one of three units Rockwood put up for sale to pare down to what it sees as its main activities.

Last month, Rockwood sold its Lauf, Germany-based CeramTec GmbH ceramics unit to British buyout firm Cinven Ltd. for ¿1.49 billion ($1.98 billion). Cinven outbid PE firms Bain Capital LLC and BC Partners Ltd.

Now Rockwood's trying to find a buyer for the final unit on its block, Sachtleben Chemie GmbH, based in Duisburg, Germany. Although the division accounted for 52% of Rockwood's first-quarter sales, analysts have said its inability to deliver stable margins makes Rockwood nervous.

In preparation for a sale, Rockwood purchased the 39% of Sachtleben Chemie it didn't already own from Finnish chemical company Kemira Oyj for an undisclosed amount on Feb. 14. Rockwood Holdings is relying on Lazard as financial adviser in the divestments and Willkie Farr & Gallagher LLP for counsel.

Written by Andrew Bulkeley in Berlin

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