Billionaire duo Nicolas Berggruen and Martin Franklin agreed to buy Alent PLC for £1.35 billion (US$2.1 billion) to expand the electronic-chemicals business of their investment firm serving makers of mobile phones and cars.
Alent investors will get £5.03 a share, either in cash or partly in shares of the billionaires’ chemical investment vehicle Platform Specialty Products Corp, the company said in a statement Monday. The offer is 49 percent higher than Alent’s Friday closing price. Today, the UK company traded 46 percent higher at £4.92 as of 9:58am.
Alent, also partly owned by activist Cevian Capital, was a deal waiting to happen after its 2012 carve out from industrial group Cookson Group PLC, which created a focused business supplying materials for circuit boards and sensors. Platform is budgeting for annual pretax cost savings of at least US$50 million as it integrates the business with peer MacDermid, purchased in 2013 for US$1.8 billion.
“It’s a full price, Platform were keen,” Alent chief executive officer Andrew Heath, who joined five months ago from Rolls-Royce Holdings PLC, said in a telephone interview.
Platform, which is betting on demand for increasingly smaller mobile phones and the addition of more electronics such as sensors in cars, is paying 13.9 times Alent’s earnings before interest, taxes, depreciation and amortization (EBITDA) on an enterprise value basis. That is the highest multiple ever paid for a UK specialty chemical company, Heath said.
The purchase is the latest deal in the electronic-chemical industry, following Merck KGaA’s purchase of AZ Electronic Materials in 2013 for US$2.8 billion and Entegris Inc’s takeover of ATMI Inc for US$952 million. Dow Chemical Co is also a competitor through its Shipley unit. Merck paid about 12.5 times EBITDA for AZ.
The market for electronics for cars, including assembly materials and chips, is growing at double
the pace of the wider automotive industry, Heath said. Platform earlier this year agreed to acquire the electronic chemical and photomasks businesses of OM Group for US$365 million as it looks to build economies of scale and broaden its offerings.
Cevian Capital, which invested in Alent prior to its demerger, agreed to tender its 21.9 percent stake. Alent was advised by Rothschild and UBS AG, while Credit Suisse advised Platform.
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