DOW JONES NEWSWIRES
Cytec Industries Inc. (CYT) has agreed to sell its pressure-sensitive adhesives product line to German glue producer Henkel AG (HENKY, HEN3.XE, HEN.XE) for about $105 million in cash as the company shifts its business focus.
The deal comes as the specialty chemicals and materials company has sought to reduce its exposure to more cyclical markets. Cytec sold its building block chemicals business last year, and it recently agreed to acquire Umeco PLC (UMC.LN) to expand its presence in aerospace and industrial applications. It is also considering spinning off its remaining coating resins business and expects to announce a decision this quarter.
"This transaction is another important step in our portfolio transformation as we seek to drive a greater amount of organic and inorganic growth from our specialty growth platforms," said Chief Executive Shane Fleming.
The sale to Henkel includes a variety of adhesives used in labels, tapes, graphics and medical applications. Henkel, which makes household and beauty products, recently said it continues to do well in China and emerging markets, and it expects growth in the U.S. as well.
The deal includes working capital of around $15 million. The product line sales were $94 million in 2011, and Cytec expects the transaction to have a neutral impact on full-year earnings in 2012.
Around 80 Cytec employees will transfer to Henkel. The deal is expected to close in the third quarter.
Cytec recently reported that its first-quarter earnings fell as coating resins sales slid.
Cytec shares closed at $63.05 on Thursday and were inactive premarket. The stock is up 41% so far this year.
-By Kristin Jones; Dow Jones Newswires; 212-416-2208; email@example.com
(END) Dow Jones Newswires
May 11, 2012 08:53 ET (12:53 GMT)
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