Cytec to buy advanced composite materials company Umeco plc

Cytec Industries Inc. announced plans to acquire all of the outstanding shares of Umeco plc, a UK provider of advanced composite materials, for approximately $439 million.

Cytec, a specialty chemicals and materials company headquartered in Woodland Park, NJ, stated that Umeco's board of directors intends to unanimously recommend the transaction to Umeco shareholders. Cytec line of products serves a variety of markets including aerospace composites, structural adhesives, automotive and industrial coatings, electronics, inks, mining and plastics.

The acquisition of Umeco will allow Cytec to further enhance and leverage its position in advanced composite materials, and expand Cytec's presence in both aerospace and industrial applications, an area where Cytec sees opportunities for growth and value creation, the company stated.

"We are excited about combining Umeco with Cytec's existing advanced composites businesses," said Shane Fleming, chairman, president and CEO. "It greatly improves our composite 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. In addition, the acquisition also enhances our near-term composite capacity while we complete capital investments over the next few years."

Founded in 1917, Umeco plc is provider of composite materials, primarily to the aerospace and defense industries, and industrial sectors such as automotive. Umeco reported revenues of $332 million in its most recent financial year ended in March 31, 2011.

The transaction will extend Cytec's portfolio of products, add new revenue streams, and enhance production capacity that will enable the combined company to leverage its strong customer relationships and partner network to expand distribution worldwide, the company stated.

"This transaction is an important step forward as we position Cytec with an industry-leading portfolio of growth businesses within our engineered materials and in process separation growth platforms," Fleming said. "We will continue to build on our recent success in capturing new business and penetrating the market with our advanced technology solutions as we seek to deliver enhanced value to our stakeholders."

Organization and management

Upon completion of the transaction, Cytec will organize the combined assets in two separate reporting segments. Umeco's advanced materials business will be integrated into a newly created High Performance Industrial Materials (HPIM) segment that will focus on non-aerospace growth markets. Cytec's Engineered Materials (CEM) segment will continue to focus on aerospace growth opportunities.

Cytec does not anticipate significant workforce reductions resulting from this transaction. The intent is to accelerate growth in industrial markets and create additional opportunities for profitable growth, the company stated.