W. R. Grace Buys Albemarle’s Fine Chemistry Services

01.03.2021 - W. R. Grace has agreed to buy Albemarle’s Fine Chemistry Services (FCS) business for approximately $570 million, a move that will significantly strengthen and expand Grace’s existing pharma portfolio.

Pharma & Consumer is Grace’s largest, fastest growing and most profitable sub-segment within its Materials Technologies business, with the pharma portfolio focused on chromatographic resins, formulation excipients and drug delivery, and pharmaceutical intermediates and APIs.

The FCS business, said Grace, gives the company a more comprehensive and differentiated offering from early development to commercialization by adding a comprehensive portfolio of high-value products and services with highly complementary analytical, regulatory and manufacturing capabilities.

It also extends Grace’s presence into high-growth areas such as oncology, diabetes, cardiovascular and antivirals. As part of the transaction, Grace will acquire Albemarle’s operations in Tyrone, Pennsylvania and South Haven, Michigan.

“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 Grace’s president and CEO, Hudson La Force. “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.”

The deal, which is expected to close in the second quarter of 2021, is expected to be accretive this year and add roughly $60 million in full-year run-rate EBITDA. Following completion, Grace will serve nine out of the top 10 pharmaceutical companies.

Commenting on the sale, Albemarle CEO Kent Masters said: “This transaction reflects our ongoing commitment to actively and continuously refine our portfolio as we focus Albemarle on its core, growth-oriented business segments. FCS is a profitable business, and we have confidence that Grace is positioned to help it thrive.”

Grace also continues to review strategic alternatives for its portfolio in order to maximize shareholder value, saying it is pursuing a number of potential opportunities.

The company has recently been targeted by activist investor and majority shareholder 40 North Management, which has made two offers for the firm. Having rejected the first offer last November, Grace told 40 North it was willing to discuss a sale after the private equity group raised its offer in January to $4.3 billion.

Author: Elaine Burridge, Freelance Journalist