W.R. Grace plans to expand pharmaceutical business

W.R. Grace & Co. plans to expand its pharmaceutical manufacturing with the acquisition of Fine Chemistry Services, a division of a Charlotte, North Carolina-based chemical manufacturer, for $570 million.

The Columbia-based specialty chemical giant said it agreed to pay $300 million cash at closing to parent company Albemarle Corp. It will fund the remaining $270 million by issuing to Albemarle nonparticipating preferred equity of a newly created Grace subsidiary.

The acquisition will expand Grace’s existing pharmaceutical portfolio within its Pharma & Consumer segment, the fastest-growing part of Grace’s materials technologies business.

The business extends Grace’s presence serving high-growth areas such as oncology, diabetes, cardiovascular and antivirals. Fine Chemistry Services has active relationships with 70 of the top 100 pharmaceutical companies.

After acquiring the business, Grace will serve nine of the top 10 pharmaceutical companies. “This acquisition is strategically and financially compelling and aligns perfectly with our strategy of building a higher growth portfolio by extending our existing capabilities into higher-growth, highvalue end markets,” said Hudson La Force, Grace’s president and CEO.

The acquisition is expected to add to Grace’s revenue growth rate and adjusted earnings per share this year. It will add about $60 million this year in earnings before interest, taxes, depreciation and amortization. The deal is expected to close in the second quarter.

Grace also said Thursday that it continues to pursue opportunities that could include a sale of the company. Last month, 40 North Management LLC, an investment arm of New York-based building materials company Standard Industries, offered to acquire all of Grace’s outstanding common stock for $65 per share in cash, an increase of a previous offer that Grace had rejected.

Grace said Thursday that the review of strategic alternatives “remains active and the company continues to pursue a number of potential opportunities.”