Cabot Deals for Specialty Chem Maker

Thursday, June 21, 2012 @ 05:06 PM gHale

In a move to focus on higher-margin specialty chemicals, Chemical maker Cabot Corp. will pay $1.1 billion to pick up Netherlands-based activated carbon manufacturer Norit NV from its private equity owners.

Leading chemical companies such as Dow Chemical Co, German conglomerate BASF SE and Ashland Inc. are focusing on specialty chemicals, demand for which tends to be resilient during economic downturns.

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Specialty chemicals see use in water purifiers, pharmaceuticals, skin creams, hair gels and cosmetics, while commodity chemicals depend on cyclical machinery makers, car manufacturers and builders.

“This acquisition supports the ongoing transformation of our portfolio to a higher margin, less cyclical, specialty chemicals-focused company,” said Cabot Chief Executive Patrick Prevost.

Cabot will buy Norit from affiliates of British private equity fund Doughty Hanson & Co Managers Ltd and Dutch investment firm Euroland Investments BV. A group of investors led by Doughty Hanson purchased Norit in 2007.

There is a move toward consolidation among specialty chemical companies, as reflected in Eastman Chemical Co.’s $3.4 billion offer for Solutia Inc. last year.

Norit has 10 plants in the Americas and Europe that make activated carbon, used in purification and filtration processes, food and beverages and pharmaceuticals.

The transaction should close by the end of the year.

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