W. R. Grace & Co. (NYSE:GRA) and Synthetech, Inc. (NZYM.OB) today announced that they have entered into a definitive merger agreement under which Grace will purchase Synthetech, a manufacturer of fine chemicals specializing in organic synthesis, biocatalysis and chiral technologies.
The aggregate purchase price for the transaction is approximately $19.2 million, less Synthetech’s unpaid debt and transaction costs at closing, and subject to a minimum cash balance of $600,000. The acquisition will provide Grace with capacity for the manufacture of specialty single-site and polypropylene catalysts used to produce plastics. In addition, Synthetech’s fine chemicals expertise in chiral and peptide intermediate synthesis will expand Grace’s discovery sciences offerings to the pharmaceutical sector.
“The addition of Synthetech’s technical expertise and its manufacturing assets is an important step in building our polyolefin catalysts business,” said Greg Poling, Vice President of W. R. Grace & Co. and President of Grace Davison. “Synthetech gives us immediate production capacity for specialty single-site and polypropylene catalysts, which significantly enhances our ability to supply our large global customers with these specialized catalysts. The acquisition eliminates the need for investing in a grass-roots facility."
Mr. Poling added, "Synthetech’s established relationships with pharmaceutical companies and their expertise in the development-stage of patented drugs also will broaden our portfolio of products and services in our discovery sciences business."
Dr. Gregory R. Hahn, Synthetech’s President and CEO, noted, “The employees at Synthetech have worked hard over the past four years to successfully turn around the company. With the Grace agreement, we believe we have created additional value for all Synthetech stakeholders, including employees, customers, and particularly shareholders. We look forward to building a new future as part of Grace.”
Single-site and polypropylene catalysts are used in the production of plastics for automobile parts, household appliances, and consumer product packaging. Grace’s line of polypropylene and polyethylene catalysts includes POLYTRAK®, SYLOPOL® and MAGNAPORE®. Grace recently announced a multi-year agreement to supply polypropylene catalysts to Borealis AG, a leading provider of chemicals and innovative plastics solutions. The previously announced expansion of Grace's polypropylene catalyst manufacturing capacity at its Worms, Germany facility is expected to be in operation in mid-2011.
The transaction has been approved by the boards of directors of both companies, but is subject to approval by Synthetech’s shareholders and the U.S. Bankruptcy Court and the satisfaction of other closing conditions. Grace anticipates completing the transaction during the fourth quarter of 2010.