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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (2793)	9/3/2011 9:55:18 AM
From: richardred	Respond to of 7252

Eastman Acquires Scandiflex Zacks Equity Research, On Friday September 2, 2011, 4:45 pm EDT Eastman Chemical Co. (NYSE: EMN - News) acquired Scandiflex do Brasil SA Industrias Quimicas for an undisclosed amount to expand its plasticizer business in Latin America. The Brazilian company manufactures materials used to produce pliable plastic. The acquired Scandiflex plasticizer business and manufacturing capabilities will be a part of Eastman’s Performance Chemicals and Intermediates (PCI) segment. In 2010, the acquired company reported net sales of $54 million. Earlier last month, Eastman also completed the acquisition of petrochemical company Sterling Chemicals Inc. for $100 million in cash. The deal is expected to be accretive to 2011 earnings per share. The transaction, which includes Sterling's plasticizer and acetic acid manufacturing assets in Texas City, Texas, is expected to be accretive to Eastman's full-year 2012 earnings per share in excess of its cost of capital. Recently, the company declared its results for the second quarter of 2011. The company reported second-quarter earnings of $2.76 per share compared with $1.95 per share a year earlier, beating the Zacks Consensus Estimate of $2.60 per share. Sales improved across all product lines and revenues climbed 26% year over year to $1.9 billion, driven by higher sales volume and increased selling prices, outpacing the Zacks Consensus Estimate of $1.8 billion. The higher sales volume was primarily attributed to growth in plasticizer product lines, increased demand for acetyl chemicals, the fourth quarter 2010 restart of a previously idled olefins cracking unit at the Texas facility, and stronger end-market demand, especially in the packaging, transportation, and durable goods markets. The increase in selling prices resulted from higher raw material and energy costs. Based on the strong first half 2011 results, the company expects to continue to deliver earnings growth in the second half of 2011. The results for the second quarter were driven by strong sales volumes and higher prices and Eastman expects the trend to continue into the third quarter as well. It expects to incur costs related to planned and unplanned shutdowns that are expected to be approximately $25 million higher in the second half of 2011 compared with the first half. Even with these higher costs, Eastman anticipates third-quarter 2011 earnings per share to be slightly higher than third-quarter 2010 earnings per share of $2.22 and expects full-year 2011 earnings per share to be slightly higher than $9.25. Eastman Chemical’s diversified chemical portfolio, along with its integrated and diverse downstream businesses, is driving earnings. Eastman benefits from business restructuring and cost-cutting measures. The company has sold unprofitable units and closed down poorly performing ones. The company, however, faces volatility in raw material and energy costs, higher pension expenses and other growth-related costs. Eastman competes with large multinational companies, such as Celanese Corp. (NYSE: CE - News) and The Dow Chemical Co. (NYSE: DOW - News) and EI DuPont de Nemours & Co. (NYSE: DD - News). Currently, Eastman has a short-term (1 to 3 months) Zacks #3 Rank (Hold) and a long-term (6 months and higher) Outperform recommendation. finance.yahoo.com

To: richardred who wrote (2793)	1/27/2012 9:10:08 AM
From: richardred	Read Replies (1) \| Respond to of 7252

The chemicals are starting to attract bids of companies, not private equity. Eastman Will Buy Solutia for $4.7 Billion to Expand in Specialty Plastics By Andrew Noel - Jan 27, 2012 8:11 AM ET Eastman Chemical Co. (EMN) agreed to buy Solutia Inc. (SOA) for about $4.7 billion, including debt, to drive expansion into higher-margin specialty plastics and chemicals. Solutia investors will receive $22 in cash and 0.12 of an Eastman share for each of their shares, the companies said in a statement today. The cash and stock offer, valuing Solutia shares at $27.65 apiece, is 42 percent higher than Solutia’s closing price yesterday. The transaction follows a hunt for assets that have less- cyclical demand and increased exposure to emerging markets such as the pending acquisition of Taminco Group NV, which is being bought by Apollo Global Management LLC. With the addition of Solutia’s plastics and materials used in cars, solar panels and glass, Kingsport, Tennessee-based Eastman is targeting a compound annual growth rate in the Asia-Pacific region approaching 10 percent in the coming years. “The acquisition of Solutia is a significant step in our growth strategy,” Chief Executive Officer Jim Rogers said in the statement. Solutia rose 42 percent to $27.76 at 8:04 a.m. before the start of regular trading in New York. Eastman is paying 8.62 times earnings before interest, taxes, depreciation and amortization to acquire St. Louis-based Solutia, compared with an average 7.73 for specialty chemical transactions over the past decade, according to data compiled by Bloomberg. Solutia’s debt stood at $1.22 billion at the end of last year. Earnings Boost Rogers is now responsible for merging the businesses to capture an expected $100 million in cost savings by the end of 2013. Spun off from Monsanto Co. (MON), Solutia emerged from Chapter 11 bankruptcy protection in 2008, with Chief Executive Officer Jeffry Quinn undertaking a broad-reaching overhaul of the business to boost margins. The company reported a 7.5 percent increase in annual sales to $2.1 billion in 2011. Adjusted earnings per share rose 27 percent to $2. The Solutia deal should be immediately accretive to earnings, excluding costs, lifting earnings per share to about $5 for 2012, and to more than $6 the following year. It will bring tax benefits to free cash flow equal to about $1 billion through 2013, the company said. Eastman plans to fund the cash portion of the deal with cash on hand and debt. Debt financing was committed by Citigroup Inc. and Barclays Plc (BARC), which served as advisers to Eastman. Jones Day provided legal counsel. Deutsche Bank AG (DBK) and Moelis & Co. provided financial advice to Solutia, while Kirkland & Ellis LLP acted as legal counsel. Perella Weinberg Partners LP advised Solutia’s board, which also received an independent evaluation of the company’s long-term plan from Valence Group LLC. To contact the reporter on this story: Andrew Noel at anoel@bloomberg.net bloomberg.com