Cytec selling coating resins business for $1.15 billion

Cytec Industries Inc. announced Tuesday that it's selling its coating resins business for $1.15 billion, as it focuses more heavily on specialty materials and metal-processing chemicals.
The resins business is being sold to Advent International, a private equity firm based in Boston. The deal is expected to close in the first quarter of 2013.
Cytec CEO Shane Fleming said the sale is part of an 18-month transformation of the Woodland Park-based company to emphasize higher-profit businesses, including mining chemicals and aerospace materials. The company is aiming for "long-term, sustainable double-digit earnings growth," Fleming said in a conference call with investment analysts.
Cytec is "divesting low-margin businesses and focusing its growth on its higher-margin franchises," said Michael J. Sison, a Cleveland- based analyst at Keybanc Capital Markets in a research note. He said the sale price came in at the upper end of the range he expected.
The coating resins segment accounted for $1.55 billion in sales, or 50 percent of Cytec's total revenue, in 2011, according to data compiled by Bloomberg. The unit has manufacturing locations around the world.
Cytec has 5,500 employees and a market capitalization of just under $3 billion. The sale is one of several moves made since February 2011 to transform the company's portfolio.
In July, Cytec paid $439 million for Umeco plc, a British provider of advanced composite materials used in the aerospace, defense and automotive industries. In April, it paid $37 million for SOIL, an Indian company that makes chemicals for metal extraction in mining.
It has also been spinning off business units. In 2011, it sold its Building Block Chemicals business for $180 million, and in August, it sold its pressure-sensitive adhesives unit for $105 million.
Cytec also announced Tuesday that it will use $452 million of the proceeds from the resins sale to buy back stock. That increased the amount authorized for stock buybacks to a total of $650 million.