Grace Expands Fast Growing Pharma Portfolio through Acquisition of Fine Chemistry Business
Highly Complementary Bolt-on Acquisition Accelerates Strategy of Building Higher Growth Portfolio
Accretive to Revenue Growth Rate, EBITDA Margin and Adjusted EPS in 2021
Significantly Strengthens Technology, Product and Manufacturing Capabilities
COLUMBIA, Md., Feb. 25, 2021 (GLOBE NEWSWIRE) -- W. R. Grace & Co. (NYSE: GRA, the “Company”) today announced that it has entered into a definitive agreement to acquire the Fine Chemistry Services business (“FCS”) of Albemarle Corporation (NYSE: ALB) for approximately $570 million, including $300 million paid in cash at closing and $270 million funded through the issuance to Albemarle of non-participating preferred equity of a newly created Grace subsidiary.
The acquisition significantly strengthens and expands Grace’s existing pharma portfolio. Pharma & Consumer is the largest, fastest growing and most profitable subsegment within Grace’s Materials Technologies business. FCS adds a comprehensive portfolio of high-value products and services with highly complementary analytical, regulatory and manufacturing capabilities to Grace’s existing pharma portfolio focused on chromatographic resins, formulation excipients and drug delivery, and pharmaceutical intermediates and active pharmaceutical ingredients (APIs).
“This acquisition is strategically and financially compelling and aligns perfectly with our strategy of building a higher growth portfolio by extending our existing capabilities into higher-growth, high-value end markets,” said Hudson La Force, Grace’s President and Chief Executive Officer. “Combining these businesses strengthens our innovation and manufacturing capabilities and gives us scale that will further strengthen our customer value proposition and drive meaningful financial results for our shareholders. FCS’ impressive talent, customer-focused culture, track record of innovation and commitment to operating excellence align well with the Grace Value Model. We look forward to working with our customers to deliver high-value solutions that span every stage of their development cycle.”
Compelling Strategic and Financial Benefits
Accretive to Growth Rate, EBITDA Margin and Adjusted EPS at Attractive Valuation. The acquisition is expected to be accretive to Grace’s revenue growth rate, EBITDA margin and
Adjusted EPS in 2021. The acquisition adds approximately $60 million in full-year run-rate EBITDA in 2021, with EBITDA margins of over 35%. Grace expects modest near-term cost synergies with
greater commercial and capital avoidance synergies over the longer-term. The investment is well aligned with Grace’s stated capital allocation strategy and M&A criteria. Seller financing adds
valuable financial flexibility and capital efficiency.