Birmingham Water Works Board (BWWB) of Birmingham, Ala., has consistently achieved the rating of the number-five water system in the United States...
Acquisition Strengthens Arch's Positions in Water Treatment and Industrial Biocides
Arch Chemicals, Inc. signed a definitive agreement to acquire Avecia's Biocides business, which is comprised of a Pool & Spa business and a Protection & Hygiene business, for approximately $210 million. The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to close near the end of the first quarter.
"These two businesses strengthen the core of our portfolio. They will greatly complement Arch's existing capabilities in water treatment and industrial biocides and present us with many exciting synergies," said Arch Chemicals' Chairman, President and CEO Michael E. Campbell. "The acquisition of the Pool & Spa business will rapidly accelerate our participation in the specialty pool and spa dealer channel and will strongly signal our commitment to this vital group of customers," he added. "Also, the Protection & Hygiene business provides the opportunity for Arch to expand our product offerings, enter into the health and hygiene customer segment and broaden our global toxicology and environmental-fate capabilities."
Pool & Spa Business
With its BAQUACIL, BAQUA Spa and related brand products, the Pool & Spa business is a leader in providing alternatives to chlorine-based sanitizers for swimming pools and spas. Pool & Spa sales are principally concentrated in North America, and those sales are exclusively through specialty pool and spa dealers.
The total acquisition cost is approximately $210 million, comprised of $200 million in cash and 446,500 shares of Arch common stock. The agreement also includes working capital and fixed asset adjustments and a $5 million contingent payment based upon future performance of the acquired businesses. The acquisition is expected to be cash and earnings accretive in 2004, excluding synergies. Arch will finance the cash portion of the acquisition from borrowings under the company's existing revolving credit facility. In connection with the pending acquisition, the company amended certain quarterly leverage and debt to total capitalization ratios for 2004, which coincide with periods of the company's peak borrowings for the seasonal working capital requirements of its Treatment Products segment.