As expected, specialty chemicals maker Cytec Industries is closing the door on 52 years of coating resins production.
With the ink barely dry on an agreement to sell its high-performance Pressure Sensitive Adhesives (PSA) product line, Cytec has announced that its venerable Coatings Resins business is now on the block.
|Cytec’s Coating Resins are used in a wide variety of protective coatings.|
Just two years ago, that unit accounted for more 40 percent of Cytec’s sales.
Cytec’s formal announcement of its long-rumored exit from Coating Resins came just 10 days after the company signed the $105 million PSA deal with German adhesives maker Henkel AG & Co.
In its announcement Monday (May 21), Woodland Park, NJ-based Cytec said that its financial advisor, J.P. Morgan Securities LLC, was looking for a buyer and that it hoped to seal a deal by the end of the year.
Shedding its Coating Resins unit is part of a “portfolio transformation strategy” that will allow Cytec to expand its fast-growing businesses in advanced composite materials and separation technologies, said chairman, president and CEO Shane Fleming.
“After extensive analysis, we determined that the sale of our Coating Resins business is our preferred alternative for separating the business,” said Fleming.
In April, 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.”
Adding and Subtracting
The Coating Resins sale, “coupled with other recent actions, will continue to create enhanced value for our shareholders,” Fleming added.
Those other actions include both the adhesives sale and an announcement last October that the company would close its powder coating manufacturing site in Brazil.
|Building Block Chemicals and Coating Resins made up the majority of Cytec’s business in 2010. The chemicals unit sold last year; Coating Resins will be next.|
On the growth side, the company announced earlier this year that it was acquiring Umeco plc, an international provider of advanced composite materials, and Star Orechem International Private Limited, an India-based manufacturer of extraction technology that will support Cytec’s separation technologies unit.
Cytec has been producing coating resins since 1960.
The business currently consists of radiation-cured (radcure) resins; liquid coating resins and additives, including water- and solvent-borne resins, urethane resins and additives; powder coating resins; and amino cross-linkers.
Cytec’s products serve a diverse range of end markets, including automotive and industrial coatings, aerospace composites and structural adhesives.
Cytec said it would not release any more information about the sale until it has a deal to announce.