Cytec Sells Paper Chemicals Business
WEST PATERSON, N.J. - Cytec Industries Inc. (NYSE:CYT) said today that it has completed the sale of its paper chemicals sizing and strength business, with estimated 1999 proforma sales of $85 million, to Bayer Corporation for approximately $90 million cash (pre-tax); in addition, Cytec will retain approximately $13 million in accounts receivable.
Cytec has also sold the direct sales portion of its retention and drainage aids products for the paper industry, including its Polyflex(R) technology, to Ciba Specialty Chemicals for approximately $23 million cash (pre-tax), and Cytec will retain approximately $2 million of accounts receivable. Cytec realized approximately $130 million in total pre-tax cash proceeds from the sale of the Paper Chemicals business.
Cytec is retaining all of its Water and Industrial Process production facilities to support its market leading Mining and Water Treatment Chemicals businesses, both are growth Platforms. The same facilities will also support new Manufacturing Agreements with Bayer Corporation and Ciba Specialty Chemicals.
Mr. David Lilley, Chairman, President and Chief Executive Officer, said, "Last March, we identified the Paper Chemicals business as non-core. In the third quarter, we announced Definitive Agreements to sell the business. We are pleased to have completed the divestment of our Paper Chemicals business to these two fine companies. Monetizing these assets and re-deploying the cash is consistent with streamlining Cytec and increasing the focus on the growth of our Platform businesses. Both are stated objectives of our Strategic Plan and Portfolio Realignment.
"The transaction and the reinvestment of the after-tax proceeds will be accretive to earnings per share from continuing operations beginning in 2001. We will invest the cash from this transaction consistent with our strategic priorities and our financial discipline. Our priorities are the organic growth of, and strategic acquisitions for, our Platform businesses -- while we continue the repurchase of Cytec stock. This divestment and our future actions will continue to demonstrate that we are aggressively executing our plan to increase shareholder value," Mr. Lilley concluded.
Cytec's Corporate Profile
Cytec Industries Inc. is a specialty chemicals and materials technology company with 1999 sales of $1.4 billion and diluted earnings per share of $2.73. Its growth strategies are based on developing technologically advanced customer solutions for global markets, including: aerospace, plastics, industrial coatings, mining and water treatment. Cytec is in the S&P mid-cap 400 index.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Achieving the results described in these statements involves a number of risks, uncertainties and other factors that could cause actual results to differ materially, as discussed in Cytec's filings with the Securities and Exchange Commission.
Contact: Cytec Industries, Inc. Investment Community: William (Bill) Cleary, 973/357-3298 Media: George Yuro, 973/357-3319