Ferro: sale of pharmaceuticals business; focus on core businesses

Ferro Corporation has completed the sale of its pharmaceuticals business, Pfanstiehl Laboratories, to PLI Holdings, Inc. The divestiture follows the company’s sale of its solar pastes assets and marks the continued execution of Ferro’s strategy to divest non-core businesses and drive earnings growth and profitability from its core Performance Materials and Performance Chemicals businesses.

Ferro Corporation has announced that it has completed the sale of its pharmaceuticals business, Pfanstiehl Laboratories, to PLI Holdings, Inc., an affiliate of Med Opportunity Partners, LLC. Consideration was comprised of a USD 16.9 million cash payment and an earn-out incentive payment of up to USD 8 million, payable over two years based on attained earnings targets. In addition, the company retained certain tax benefits with an estimated value of approximately USD 5 million. Ferro’s pharmaceuticals business generated segment income of USD 2.4 million in 2012.
The divestiture follows the company’s 6 February 2013 sale of its solar pastes assets and marks the continued execution of Ferro’s strategy to divest non-core businesses and drive earnings growth and profitability from its core Performance Materials and Performance Chemicals businesses.
“The sale of our pharmaceuticals business is another important milestone in our value creation strategy. The Ferro portfolio now is more fully concentrated in our core technologies in coatings and colour and glass science, polymer science, and organic synthesis,” said Peter Thomas, Interim President and Chief Executive Officer of Ferro. “Together with our previously announced initiatives to reduce costs by more than USD 50 million, the successful sale of our solar pastes assets, and the additional financial flexibility gained by amending our credit facility, today’s announcement reflects the Board’s and management’s commitment to drive shareholder value from our Performance Materials and Performance Chemicals businesses. We will remain focused on improving return on invested capital and cash flow by streamlining operations, reducing operating costs, and pursuing select growth opportunities. We are energized by the progress we’re making and committed to reaching our value creation objectives.”
Thomas added, “On behalf of everyone at Ferro, I thank the Pfanstiehl team for their many contributions. I am confident they will have exciting opportunities ahead. I also extend our thanks to our advisors on the transaction. The sale is the culmination of an extended period of marketing the business.”