Ferro Expands Pigments Business
US performance materials company Ferro has expanded its pigments business with two acquisitions at a cost of around $60 million.
A definitive agreement has been made with Belgium’s Cappelle Pigments, a privately held company that produces and sells specialty, high-performance organic and inorganic pigments to more than 75 countries. Ferro is paying about $56 million on a cash-free and debt-free basis for the firm that specializes in weather-, heat- and light-resistant organic pigments.
Cappelle is also a market leader in certain inorganic pigments that complement Ferro’s market leading positions in Complex Inorganic Colored Pigments (CICPs) and Ultramarine Blue. The transaction is expected to close by the end of this year, subject to the usual closing conditions and regulatory approvals.
The proposed acquisition follows the purchase on Aug. 1 of certain assets from Delta Performance Products, a producer of customized colorant blends that use Ferro’s CICPs for the concrete and outdoor hardscape markets. Financial details of this transaction were not disclosed.
Aggregate sales of both businesses in 2016 are expected to be about $76 million with adjusted EBITA of around $11 million.
Peter Thomas, Ferro’s chairman, president and CEO, said the acquisitions are great additions to the company’s growing pigments business, and he expects to realize commercial and operating synergies of $3 million to $4 million over the next 12 to 24 months.
The Ferro chief likened the acquisitions to the July 2015 purchase of Spanish pigments producer Nubiola, for which the company paid €149 million. He commented: “They both increase the breadth of options we can offer our customers, increase our technical capabilities and enhance our market position. The transactions will increase Ferro’s PPO [pigments, powders and oxides] business by approximately 30% and expand our addressable market for pigments by a factor of four, to approximately $4 billion.”
