Ferro Mulls Strategic Options
US-based Ferro Corp. is exploring strategic options that include a sale, according to Bloomberg, citing people familiar with the matter. The Ohio-headquartered group is reported to be working with financial advisers. Ferro has not commented.
The Bloomberg sources said the move comes amid heavy consolidation among chemical companies with coatings operations, as tepid growth and volatile commodity prices spur industry players to join forces.
Ferro is not alone in considering its options. In June, Axalta Coating Systems initiated a review that could potentially include a sale and last month Celanese started a review process that could result in a breakup of the Texas-based specialty materials company.
This is also not the first time that Ferro has considered a sale. In March 2016, the Mayfield Heights company was reported to have received takeover bids from Apollo Global Management and CVC Capital Partners, rejecting both as being too low.
That same month, Ferro shareholder, US hedge fund FrontFour Capital, had called on the company to pursue strategic alternative, including a sale, arguing that potential buyers would be interested in Ferro’s “significant operational improvement, strong market share positions, robust free cash flow generation and deep acquisition pipeline”.
In its third-quarter results released earlier this month, Ferro president and CEO Peter Thomas said ongoing global macroeconomic uncertainty would continue for the rest of 2019 and into 2020. He cited cautious customer sentiment and persistent weakness in some key end markets, including European construction and global automotive production.