Suppliers News

A. Schulman Offers to Acquire Ferro Corporation

March 11, 2013

A. Schulman, Inc. (Nasdaq-GS: SHLM) announced today that it has made a proposal to the Board of Directors of Ferro Corporation (NYSE: FOE) to acquire all of the outstanding shares of Ferro common stock for per-share consideration of $6.50, representing an estimated total enterprise value of approximately $855 million including total indebtedness.  The offer represents a 25 percent premium over the closing price of Ferro common stock on March 1, 2013, and a 32 percent premium over the volume-weighted average trading price over the preceding 60-day period.

The Company said its proposed offer price of $6.50 per share includes an immediate cash payment of $3.25 for each Ferro share outstanding and $3.25 worth of A. Schulman common stock.  When cost savings and synergies are fully implemented, A. Schulman estimates annual savings of $35 million over and above the previously announced Ferro targets.  Based on these additional savings, A. Schulman believes that its offer presents the opportunity for significant future value to Ferro shareholders through the equity portion of the consideration.  A. Schulman stated that its offer was based upon publicly available information about Ferro, which reported sales of approximately $1.2 billion through the first nine months of its fiscal year ended December 31, 2012.  However, with greater visibility into Ferro's businesses, A. Schulman expects its offer could be adjusted subject to customary due diligence.

A. Schulman expressed its "strong intent" in pursuing the combination in a letter to Ferro on February 13, 2013.  Ferro's Board rejected A. Schulman's offer and expressed their belief that the company should remain independent.  A. Schulman first contacted Ferro in November 2012.

"A. Schulman and Ferro are both recognized leaders in specialty chemicals with value-added product lines, similar business models, complementary competencies, markets and applications," said Joseph M. Gingo, Chairman, President and Chief Executive Officer of A. Schulman.  "We believe our combination will deliver superior value to our respective shareholders and offer better value to customers, and we would welcome the opportunity to engage in a mutually beneficial dialogue with Ferro's Board and management."

Gingo added, "A. Schulman has demonstrated a proven ability to execute reorganization, growth and acquisitions.  Ferro's business units align with A. Schulman's core competencies with the exception of Pharmaceuticals, which is not strategic to us.  We see substantial synergies and both geographic and market growth opportunities resulting from this compelling combination, which we would hope to be a consensual transaction."