M&As: Standard to acquire WR Grace for US$7 bn; Oerlikon to acquire INglass

US speciality chemical firm W. R. Grace & Co. will be acquired by Standard Industries Holdings Inc., the parent company of Standard Industries, a privately held global industrial company, for an all-cash transaction valued at approximately US$7 billion, including Grace’s pending pharma fine chemistry acquisition. Standard Industries’ related investment platform 40 North Management is a long-standing shareholder of Grace.

Grace manufactures polyolefin catalysts for the production of PP and PE resins, as well as surface modifiers for thin polymer films. It also licenses the Unipol gas phase PP process technology for the production of a broad range of PP resins. Grace acquired the Unipol PP technology from Dow for US$500 million in 2013.

The closing of the transaction is subject to customary closing conditions, including approval by Grace shareholders and the receipt of certain regulatory approvals. The transaction is not contingent upon the receipt of financing. Financing commitments have been provided by J.P. Morgan, BNP Paribas, Citi and Deutsche Bank, and investment funds affiliated with Apollo Global Management as capital partner.

40 North, a holder of 14.9% of shares of Grace common stock, has entered into a voting agreement with Grace, pursuant to which it has agreed, among other things, to vote its shares of Grace common stock in favor of the transaction.

The parties expect the transaction to close in the fourth quarter of 2021. Upon completion of the transaction, Grace will become a privately held company and Grace’s common stock will no longer be listed on the New York Stock Exchange.

Grace will operate as a standalone company within the portfolio of Standard Industries Holdings, which includes Standard Industries’ businesses GAF, BMI Group, Schiedel, Siplast, SGI and GAF Energy.

Meanwhile in other news, Swiss firm Oerlikon, a provider of surface engineering, polymer processing and additive manufacturing, has signed an agreement to acquire Italy-headquartered INglass S.p.A. and its hot runner systems technology operating under its HRSflow business.

Terms were not disclosed.

Oerlikon says the acquisition is a step towards expanding its current manmade fibres business into the larger polymer processing market. The acquisition accelerates and enhances existing organic initiatives to diversify and strengthen the company’s core high-precision polymer flow control capabilities, products and services. The completion of the transaction is subject to customary regulatory approvals and is expected by the second quarter of 2021.

To reflect Oerlikon’s expansion into a larger high-growth market, the Manmade Fibers Division will be renamed as Polymer Processing Solutions Division. This division will have two business units: Flow Control Solutions and Manmade Fibers Solutions. The busines unit Flow Control Solutions will combine the expertise of Oerlikon Barmag’s existing gear metering pumps business line and INglass’ HRSflow operations. The business unit Manmade Fibers Solutions will continue to focus on growing the existing chemical fibre machinery and plant engineering business, offering plant solutions for the production of polyester, polypropylene and polyamide.

The Oerlikon Barmag competence brand already offers high precision flow control related components, including a large selection of gear metering pumps for textile and non-textile markets. These pumps are used in silicone casting, dynamic mixing and oil spraying for the chemical, paint, polymer processing and automotive industries. This double-digit million CHF business, which has grown in recent years, will be merged with INglass’ HRSflow hot runner technologies under the new business unit Flow Control Solutions. HRSflow’s excellent market access to many OEMs in and outside the automotive industry brings significant growth opportunities.

Italian firm INglass S.p.A. was established in 1987. Its product portfolio includes hot runners as well as engineering and consultancy services for the advanced development of polymer processing products. INglass’ HRSflow hot runner systems are applied in multiple industries from automotive, consumer goods and household appliances to packaging, waste management, construction and transportation.

Its 2020 revenues were approximately CHF135 million and the acquisition is expected to be immediately accretive to Oerlikon’s margins and cash flows. INglass has more than 1 000 employees and 55 sites worldwide, including production plants in Italy, China and the US. Among these sites are INglass’ newly renovated headquarters and production at its primary location in San Polo di Piave near Venice, Italy. The investment modernised the facilities with automated production. The other two production sites are in Zhejiang (Hangzhou Province) in China and Michigan (Grand Rapids) in the US.

Following the integration with Oerlikon Barmag’s gear metering pumps business of about 200 employees in Remscheid, Germany, the new Flow Control Solutions business unit will have round about 1,200 employees.

Combining the divisions plant engineering and process know how with expertise on high precision flow control components technologies has a significant impact on product quality in nearly all applications, which opens up a platform for further organic and inorganic growth."

(PRA)

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