Swiss Lonza to buy biocides firm Arch Chemicals
The Switzerland-based Lonza Group, one of the world's leading suppliers to the pharmaceutical, healthcare and life science industries, will acquire US biocides company Arch Chemicals for $47.20/share in cash, or about $1.2 billion.
Lonza's offer represents a 36.7% premium to Arch Chemicals' average closing price over the last 30 trading days, it said. Based on the offer price for all the outstanding shares, Arch Chemicals' enterprise value would be $1.4 billion.
Lonza expects to commence the tender offer by July 15 and to complete the tender offer later in 2011.
"This transaction represents an excellent strategic and cultural fit,” said Stefan Borgas, CEO of Lonza. “Lonza and Arch Chemicals offer highly complementary products and technologies and together will be the global leader in controlling unwanted microbes.”
"We are pleased to have reached this agreement with Lonza, a company that knows our business well and shares our commitment to continuous improvement in innovation, operational excellence, safety and sustainability.” added Michael Campbell, CEO of Arch Chemicals.
Upon transaction completion, Lonza will have the world's leading microbial control business with 2010 pro-forma sales in this life science market of approximately $1.6 billion, combining the complementary product solutions of both companies.
The new business should be ideally positioned to increase R&D and product development spending across its broader product portfolio, the companies said.
In particular, the hygiene, water treatment, materials protection and personal care segments are expected to be the key growth sectors for the combined business, Lonza officials said.
The combined business will also have a broad line-up of regulatory approved microbial control active ingredients, which will allow Lonza to bring to market new innovative microbial control formulations and thereby grow revenues across the portfolio, it said.
"The acquisition of Arch Chemicals is the next logical step in Lonza's life science focused strategy," noted Borgas.
"It will allow us to expand our non-pharma life science business to achieve a well-balanced profile based upon two world leading growth businesses - pharmaceutical contract manufacturing and microbial control. The acquisition of Arch Chemicals will further strengthen our position in the attractive microbial control market.”
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