Ashland to buy Hercules for $2.6 billion
July 11, 2008
According to the
Associated Press, chemical company Ashland Inc. said recently it will
acquire Hercules Inc. in a cash-and-stock deal valued at $2.6 billion.
Ashland has agreed to pay Hercules
shareholders $18.60 per share in cash and 0.093 of a share of Ashland
common stock for each Hercules share, or $23.01 per Hercules share
based on the July 10 closing price of Ashland stock.
The price represents a 38 percent premium over recent closing prices of Hercules stock.
The deal is valued at about $2.6
billion, based on 113.1 million shares outstanding as of April 25. The
companies valued the deal at about $3.3 billion, including the
assumption of $700 million of debt.
Based in Wilmington, Del., Hercules
makes specialty chemicals used in the manufacture of a variety of
products. The company is a leading supplier of specialty chemicals to
the pulp and paper industry.
After the transaction closes, Ashland
will have pro forma combined revenue for the 12 months ended March 31
of more than $10 billion, of which $3.5 billion is generated outside of
The acquisition boosts Ashland''s
position in the pulp and paper business, the company said. The combined
businesses will also provide additional opportunities in other key
water treatment markets, Ashland said, including municipal, industrial
Ashland expects to realize annualized
run-rate cost savings of at least $50 million by the third year
following the close of the deal, which is expected by the end of 2008.