Cabot (NYSE:CBT) has agreed to buy activated carbon maker Norit NV from Doughty Hanson & Co. Managers and Euroland Investments for $1.1 billion in a move that Cabot says will strengthen its specialty chemicals portfolio.
Norit is in the activated carbons market, where performance materials are used in multiple high-end applications including environmental protection, air and water purification, food and beverages and pharmaceuticals.
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The company, which will continue to be operated by current chief executive Ronald Thompson, operates 10 manufacturing facilities throughout the Americas and Europe and employs 760 people. The company last year generated sales of $360 million on an EBITDA of $92 million.
“Norit’s growth will significantly benefit from Cabot’s process engineering capability, broad geographic footprint, especially in emerging markets, and extensive material science expertise,” the companies said in a joint statement.
Boston-based Cabot, which plans to finance the deal using $200 million in cash and $300 million in debt, forecasts a 20- to 25-cent bump to its fiscal 2013 earnings from the transaction and a 30- to 40-cent increase in 2014, excluding one-time acquisition costs. The combined entity is also expected to realize up to $50 million in tax synergies.
However, investors sent Cabot’s shares down nearly 3% to $36.91 Thursday.
Pending the receipt of all approvals, the transaction is slated to close within 2012. J.P. Morgan (NYSE:JPM) is acting as Cabot’s financial advisor.