Specialty chemicals maker Cytec Industries is getting out of the adhesives business and may close the door on coatings, too.
|Cytec was touting its Coating Resins in February at the Middle East Coatings Show.|
The New Jersey-based supplier of resins and additives announced Friday (May 11) that it had reached an agreement to sell its high-performance Pressure Sensitive Adhesives product line to German adhesives maker Henkel AG & Co. for $105 million.
The product line had $94 million in sales in fiscal year 2011.
Reports said Cytec was edging away from cyclical markets, and chairman and CEO Shane Fleming confirmed that the rest of Cytec’s Coatings Resins business may be the next to go.
Cytec’s products serve a diverse range of end markets, including a wide variety of automotive and industrial coatings, aerospace composites and structural adhesives. The company has been producing coating resins since 1960.
“This transaction is another important step in our portfolio transformation as we seek to drive a greater amount of organic and inorganic growth from our specialty growth platforms,” Fleming said in a statement. “We continue to make meaningful progress with our ongoing evaluation of the remaining Coating Resins business and are on track to announce our decision this quarter.”
|Less than two years ago, Coating Resins made up the largest segment in Cytec’s portfolio. The Building Block Chemicals business was sold in 2011.|
Last year, Cytec sold its Building Block Chemicals business to an affiliate of HIG Capital LLC for $180 million, saying it wanted to focus more on its “core growth platforms,” which then included coating resins, according to Fleming.
In October, however, Fleming said that the European market in particular remained weak and that the firm would also close its powder coating manufacturing site in Brazil.
In April, however, Cytec reported that its first-quarter 2012 Coating Resins sales had decreased by 6% and sales volumes had dropped 9% over the prior-year period, due to “weaker demand across most of our product lines, particularly in Europe and Asia Pacific.”
Henkel has been in the adhesives business since 1923 and is a world market leader in adhesives, sealants and surface treatments for industrial and other applications.
Henkel said the acquisition fit the company’s strategy “to grow its core businesses and further enhances Henkel’s competence in the area of high-performance adhesives.”
Henkel’s Jean Fayolle said the Cytec product line would complement “Henkel’s well established high-performance PSA business and is expected to strengthen our position in this field.”