Industry News

Hercules Completes Sale of BetzDearborn Water Treatment Business to GE

Published on 2002-05-06. Author : SpecialChem

Wilmington, DE, April 29, 2002 . . . Hercules Incorporated (NYSE: HPC) announced today that it has completed the sale of the Water Treatment business of its BetzDearborn Division to GE Specialty Materials, a unit of General Electric Company (NYSE: GE). The Paper Process Chemicals business, which today represents approximately one- third of the BetzDearborn company purchased by Hercules in 1998, will remain with Hercules and has been completely integrated into the Company's Pulp and Paper Division. In addition, Hercules will have an agreement with GE to distribute and service BetzDearborn's water treatment products to the pulp and paper industry.

The purchase price is $1.8 billion in cash, with net after tax proceeds of approximately $1.665 billion. As previously announced, the proceeds from the divestiture will be used by Hercules to reduce debt and serve as collateral for outstanding letters of credit. After applying the proceeds to repay debt, the Company's total outstanding debt and preferred securities will be reduced to approximately $1.3 billion, which brings the Hercules credit profile more in line with the specialty chemical industry.

"This sale marks a significant achievement in our ongoing program to improve the Company's financial and operating condition. This will enable us to focus on the future of our four remaining businesses, which hold #1 positions in their markets, and to achieve our goal of enhancing value for our shareholders," said Dr. William H. Joyce, Chairman and Chief Executive Officer of Hercules. "We thank everyone involved in bringing this transaction to a successful closure ahead of our planned timeline."

With the completion of the sale, Hercules four businesses include: Aqualon, Pulp and Paper, FiberVisions, and Rosin and Terpenes. Total revenues will be approximately $1.7 billion.

Aqualon is a world leader in managing the properties of water-based systems. The Pulp and Paper Division is the largest and most technically advanced supplier of functional, process and water treatment chemical programs for the pulp and paper industry.

FiberVisions is the world's leading producer of polypropylene staple fibers for hygiene markets. The Rosin and Terpenes business produces specialty derivatives for adhesives and food and beverage applications and is the world's only producer of pale wood rosin.

Source: Hercules, Inc.

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