Cytec, which already produces aerospace composites, structural adhesives, automotive and industrial coatings, has stated that it sees substantial growth opportunities in the composites market.
Leamington Spa-based Umeco supplies every Formula One team with composite technology to reduce the weight of the cars and makes products for Boeing, Airbus and BAE Systems.
Cytec’s strategy is to increase its composites business in the manufacturing sector, where it sees potential strong growth as industrial firms seek to reduce product weight to lower CO2 emissions and save on fuel costs.
Commenting on the acquisition, Shane Fleming, chairman and CEO at Cytec, said: “Combining Umeco with Cytec’s existing advanced composites businesses greatly improves our presence in the industrial sector, where we see tremendous potential for significant value creation in applications like automotive as customers seek to reduce weight and CO2 emissions.”
Rising oil prices and environmental legislation has increased the need for automotive manufactures to lighten vehicles as end users seek to reduce their bills at the fuel pump.
The latest example of this comes from Ford, which yesterday announced a joint venture with Dow Chemicals to reduce the weight of its new cars and trucks by up to 340kg by 2020.
Mr Fleming added: “The acquisition of Umeco will provide us with additional scale, a dedicated supply chain well-tailored to the needs of the high performance industrial sector and application development capabilities that will help us respond quickly and effectively to customers’ needs.”
The US-based firm has created a strategy that focuses on engineered materials, process separation and additive technology.
Neil Johnson, non-executive chairman of Umeco, said: “The board of Umeco believes that the offer from Cytec of 550 pence per Umeco share is an attractive price for shareholders, and represents a valuation that reflects the future growth potential of Umeco while providing certainty, in cash, to Umeco shareholders.”
Barclays is acting as sole financial adviser and corporate broker to Cytec and Cytec Bidco, its UK subsidiary, with Rothschild acting as joint financial adviser to Umeco.
Investec is also acting as joint financial adviser and sole corporate broker to Umeco.
