Grace to Sell Water Treatment Division to Betz for $632 Million
Mar. 11, 1996
BOCA RATON, Fla. (AP) _ Betz Laboratories Inc. announced a deal Monday to buy W.R. Grace & Co.'s competing Dearborn division, a move that would make it the world leader in water treatment chemicals.
The purchase _ for $632 million in cash _ will create a global company, combining Dearborn's international operations with Betz's bases in the United States, Europe and Asia.
Betz's domestic sales were 72 percent of revenues, while Dearborn's international sales accounted for 70 percent of sales.
Betz president William Cook said the deal ``puts us in a strong position for accelerated worldwide growth.''
Betz, based in Trevose, Pa., projects combined sales of $1.2 billion when the purchase closes in the second quarter. Dearborn had sales of $400 million last year.
Grace has been narrowing its focus for years. The sale of Dearborn and Grace's National Medical Care dialysis business would leave the Boca Raton-based company focused on specialty chemicals.
Grace, which rejected a takeover proposal last week from Hercules Inc., said it would use proceeds from the sale of Dearborn and NMC to cut debt and repurchase 20 percent of its common stock.
Betz expects to cut costs $40 million to $50 million within 18 months.
Betz's emphasis has been in the chemical, petroleum refining, paper, automotive, power and steel industries.
Dearborn's key industries are paper, petroleum refining, petrochemical, food processing and power.
The division has 2,500 employees at 12 manufacturing plants and six research centers in the United States and abroad.
Its small South American marine chemicals business is not part of the sale and is to be sold separately.