Ferro Corporation has announced that it has entered into a definitive agreement to sell its Tile Coatings Business to Pigments Spain, S.L., a company of the Esmalglass-Itaca-Fritta group, which is a portfolio company of Lone Star Funds, for $460 million in cash, with the potential for an additional $32 million in cash based on the performance of the business pre-closing, subject to customary adjustments. Consummation of the sale is subject to the receipt of regulatory approvals and the satisfaction or waiver of other customary closing conditions.
Advancing Dynamic Innovation and Strategy
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This transaction will substantially advance the Dynamic Innovation and Optimization phase of our strategy and strengthen our balance sheet,” said Peter Thomas, chairman, president and CEO of Ferro Corporation. “
It will result in a Ferro more fully focused on higher-growth industries where our market-leading technology, innovation, and customer-centric service generate higher gross margins.”
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The transaction also will reduce our manufacturing footprint and end-market exposure in Europe, optimizing our portfolio with more equal balance between Europe and the rest of world and with less exposure to commercial and residential construction markets. Given these strategic benefits, and the enhanced balance sheet resulting from the transaction, we are confident that divesting the Tile Coatings Business will deliver substantial value for our shareholders. We also are very pleased that our Tile Coatings colleagues will have the opportunity to grow the business and thrive under new ownership.”
With annual sales of approximately $510 million for the twelve months ended September 30, 2019, Ferro’s Tile Coatings Business produces coatings for ceramic tiles used in residential and non-residential construction. Historically, it has been part of the Company’s Performance Coatings reporting segment, along with Ferro’s Porcelain Enamel Business, which will be retained.
In accordance with U.S. Generally Accepted Accounting Principles, the Company expects the Tile Coatings Business will be classified as "held for sale" and reported as discontinued operations.
Source: Ferro