Solutia buys US energy-saving films firm Southwall
US specialty chemicals producer Solutia has agreed to acquire California-based energy-saving films and glass products company Southwall Technologies for an aggregate equity purchase price of about $113 million.
The acquisition will be funded by Solutia from existing cash on hand.
"This acquisition positions Solutia as the world leader in advanced sputtering technology, combining the industry's leading commercial expertise with next-generation innovation capabilities to provide advanced film solutions to the premium window film and electronics markets," said Jeffry N. Quinn, CEO of Solutia.
"Our growth strategy remains focused on enhancing our portfolio through synergistic bolt-on acquisitions that allow Solutia to better serve high-growth markets and support the success of our existing businesses,” he added. “This is just one component of our strategy to put our strong cash flow to work to create value for our shareholders."
The acquisition will secure Solutia's access to Southwall's proprietary XIR technology, a key base material for the Company's high-growth V-Kool premium aftermarket window films.
In addition, the acquisition adds state-of-the-art manufacturing capacity and proprietary capabilities to support the fast-growing demand for high-tech films for the electronics market and positions Solutia to provide a broader range of product solutions, the company said.
This includes a new product offering in which transparent film is encapsulated between Saflex polyvinyl butyral interlayers to form a protective barrier in laminated glass against the harmful effects of the sun.
"We look forward to realizing the potential of Southwall's portfolio of energy efficiency solutions as we combine our innovation in sputtering technology with Solutia's commercial and market expertise," said Dennis Capovilla, CEO of Southwall Technologies.
"Together we will focus on the delivery of next-generation films to our customers that achieve unmatched levels of solar performance and optical clarity,” he added.
Under the terms of the agreement, it is anticipated that a subsidiary of Solutia will commence a tender offer for all of the outstanding shares of Southwall common stock no later than October 25.
Southwall stockholders will receive $13.60/sharein cash for all outstanding shares of Southwall common stock tendered in the offer and accepted for payment by Solutia, representing a 45% premium to the closing price per share of Southwall common stock on October 6.
The closing of the tender offer is subject to customary terms and conditions, including the tender of a majority of the outstanding shares of Southwall and the receipt of regulatory approvals.
Following the successful completion of the tender offer and following the receipt of stockholder approval, if necessary, the agreement provides for Southwall to merge with a subsidiary of Solutia and become a wholly-owned subsidiary of Solutia, with all shares of Southwall common stock then outstanding being converted into the right to receive the offer price in cash.
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