Glendale Chemical Firm OKs Buyout Offer of $260 Million
Products Research & Chemical Corp. in Glendale said Monday that it has agreed to be acquired by Courtaulds PLC, a British company, for about $260 million.
PRC makes coatings, sealants, adhesives and other specialty chemicals. It earned $8 million on sales of $100.3 million in 1988. Courtaulds, a chemicals, textiles and industrial products concern, had bought 10.5% of PRC in May for $25 a share, or $21.7 million.
Under an agreement reached Friday, Courtaulds has begun a tender offer to buy the remaining 8.1 million PRC common shares outstanding for $32 a share. The offer is scheduled to expire at midnight Aug. 4, unless extended.
The agreement sent PRC’s stock soaring on the New York Stock Exchange. The stock closed Monday at $31.625, up $6.50. It rose $2.625 on Friday.
PRC’s top two executives, Chairman George Gregory, 72, and Chief Executive Dean Willard, 42, said in a telephone interview that they would retain those positions when the company becomes a Courtaulds subsidiary. The executives said PRC’s directors approved the deal because the price is attractive and it would benefit PRC to be part of Courtaulds as the British company continues its aggressive effort to expand in the U.S. adhesives and coatings market.
Courtaulds wants to spend $500 million acquiring U.S. firms to increase its share of the market, “and this is not the sort of thing we could afford to do ourselves,” Gregory said. The company hopes to generate sales of $500 million to $1 billion in adhesives and sealants “by further acquisitions to be folded into PRC,” he said.
Courtaulds’ initial investment in PRC also called for the companies to exchange marketing and technical expertise. But had PRC stayed independent while Courtaulds continued buying PRC’s competitors, “there could be some conflicts,” Willard said. “It just simply made sense to really take a hard look” at merging instead, he said.
PRC’s products are used by the military and various commercial industries. They protect aircraft parts against corrosion and leakage, provide non-skid and anti-fire coating for the decks of aircraft carriers and bond dual-paned windows used in skyscrapers, to name a few applications.
The company evolved from a being small distributor of chemicals into a manufacturer with its own proprietary technology under the leadership of Gregory, a Russian immigrant who joined the company in 1948 after earning a bachelor’s degree in chemistry at UCLA.
