Ferro Expands Its Technology & Product Portfolio by Completing the Acquisition of Glass Coatings Manufacturer Pinturas Benica...
June 01 2016 - 5:09PM
Business Wire
- Strengthens Glass Coatings Portfolio
by Expanding Technology Position into Organic Paints for Decoration
of Container Glass
- Increases Performance Colors and
Glass Segment’s Addressable Market by Approximately $100
Million
- Company Expects Acquisition will be
Accretive to 2016 Earnings
Ferro Corporation (NYSE: FOE, “Company”) announced today that it
has completed the acquisition of Pinturas Benicarló, S.L.
(“Pinturas”). Ferro has acquired 100% of the equity of privately
held Benicarló, Spain-based Pinturas for €15.0 million in cash, on
a cash-free and debt-free basis, subject to working capital and
other adjustments. The acquisition adds new waterborne coatings
technology to Ferro’s Performance Colors and Glass segment and
provides Ferro with an entry into the painted glass container
market.
Pinturas is one of the world’s largest producers of waterborne
industrial paints that specializes in the niche sector of organic
paints for application on glass substrates. Pinturas serves some of
the largest international glass manufacturers and processors. The
primary use for Pinturas’ paints is for the decoration of container
glasses for perfume and cosmetic, food and beverage and other
consumer products applications, where painted glass packaging
communicates brand identity. The company provides specialized
product solutions specifically formulated for their customers’
production methods and desired finishes.
Pinturas sales, for the full-year of 2016, are expected to be
approximately €7.5 million. Ferro expects that the acquisition will
be accretive to 2016 adjusted earnings by approximately $0.02 per
diluted share, excluding the impact of purchase accounting
adjustments. With the acquisition, the Company is increasing its
full-year 2016 adjusted earnings guidance to $0.95 - $1.00 per
diluted share (see adjusted earnings note below).
Commenting on the completed transaction, Peter Thomas, Chairman,
President and CEO of Ferro Corporation, said, “Pinturas is an
excellent strategic fit with our Performance Colors and Glass
Segment. Pinturas is a market leader in the highly fragmented niche
segment for organic coatings for container glass. Total sales of
organic coatings for container glass are estimated to be
approximately $100 million annually. We believe the combination of
Pinturas’ product offering and our significant market position in
glass coatings and broad geographic reach will be highly
synergistic.”
Mr. Thomas concluded, “Pinturas and Ferro share similar market
approaches. We are close to our customers and take pride in our
ability to quickly and effectively service their needs by providing
highly formulated products and technical solutions. We are very
pleased to add Pinturas to the Ferro portfolio and are looking
forward to working with the Pinturas management team to expand its
market reach and continue its tradition of market success.”
About Ferro Corporation
Ferro Corporation (http://www.ferro.com) is a leading global
functional coatings and color solutions company that supplies
technology-based performance materials, including glass-based
coatings, pigments and colors, and polishing materials. Ferro
products are sold into the building and construction, automotive,
appliances, electronics, household furnishings, and industrial
products markets. Headquartered in Mayfield Heights, Ohio, the
Company has approximately 4,860 employees globally and reported
2015 sales of $1.1 billion.
About Pinturas Benicarló, S.L.
Pinturas Benicarló, S.L. (www.pinturasbenicarlo.com) was founded
in 1992. Pinturas is an industrial paints producer with many years
of experience in the manufacture and sale of industrial paints,
specializing in glass painting. Pinturas provides high quality
specialized paints and technical assistance and partners with large
international companies that require high-quality standards and
significant R&D support.
Adjusted Earnings Guidance
Adjusted earnings per diluted share guidance excludes the impact
of certain items, primarily comprised of restructuring activities,
transaction-related expenses, gains and losses on asset sales, and
mark-to-market adjustments to our pension and postretirement
benefit liabilities. The impact of adjusting for these items at the
first quarter of 2016 was a reduction to GAAP earnings per diluted
share from continuing operations of $0.01, from $0.23 to $0.22. The
Company is unable to reconcile its adjusted earnings per diluted
share guidance for full-year 2016 without unreasonable effort. It
is not possible at this time to identify the potential amount or
significance of these items for the balance of the year, as they
have not occurred yet.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of Federal
securities laws. These statements are subject to a variety of
uncertainties, unknown risks, and other factors concerning the
Company’s operations and business environment. Important factors
that could cause actual results to differ materially from those
suggested by these forward-looking statements and that could
adversely affect the Company’s future financial performance include
the following:
- Ferro’s ability to integrate Pinturas
and to generate the expected results, including sales growth and
the transaction being accretive to earnings;
- demand in the industries into which
Ferro sells its products may be unpredictable, cyclical, or heavily
influenced by consumer spending;
- the effectiveness of the Company’s
efforts to improve operating margins through sales growth, price
increases, productivity gains, and improved purchasing
techniques;
- currency conversion rates and economic,
social, political, and regulatory conditions around the world;
- Ferro’s ability to successfully
introduce new products or enter into new growth markets;
- Ferro’s ability to successfully
implement and/or administer its cost-saving initiatives, including
its restructuring programs, and to produce the desired
results;
- the impact of interruption, damage to,
failure, or compromise of the Company’s information systems;
- restrictive covenants in the Company’s
credit facilities could affect its strategic initiatives and
liquidity;
- Ferro’s ability to access capital
markets, borrowings, or financial transactions;
- the availability of reliable sources of
energy and raw materials at a reasonable cost;
- increasingly aggressive domestic and
foreign governmental regulations on hazardous materials and
regulations affecting health, safety and the environment;
- sale of products into highly regulated
industries;
- limited or no redundancy for certain of
the Company’s manufacturing facilities and possible interruption of
operations at those facilities;
- competitive factors, including intense
price competition;
- Ferro’s ability to protect its
intellectual property or to successfully resolve claims of
infringement brought against it;
- the impact of operating hazards and
investments made in order to meet stringent environmental, health
and safety regulations;
- management of Ferro’s general and
administrative expenses;
- Ferro’s multi-jurisdictional tax
structure and its ability to reduce its effective tax rate,
including the impact of the Company’s performance on its ability to
utilize significant deferred tax assets;
- the effectiveness of strategies to
increase Ferro’s return on invested capital, and the short-term
impact that acquisitions may have on return on invested
capital;
- stringent labor and employment laws and
relationships with the Company’s employees;
- the impact of requirements to fund
employee benefit costs, especially post-retirement costs;
- implementation of new business
processes and information systems, including the outsourcing of
functions to third parties;
- risks associated with the manufacture
and sale of material into industries making products for sensitive
applications;
- exposure to lawsuits in the normal
course of business;
- risks and uncertainties associated with
intangible assets;
- Ferro’s borrowing costs could be
affected adversely by interest rate increases;
- liens on the Company’s assets by its
lenders affect its ability to dispose of property and
businesses;
- Ferro may not pay dividends on its
common stock in the foreseeable future;
- amount and timing of any repurchase of
Ferro’s common stock; and
- other factors affecting the Company’s
business that are beyond its control, including disasters,
accidents and governmental actions.
The risks and uncertainties identified above are not the only
risks the Company faces. Additional risks and uncertainties not
presently known to the Company or that it currently believes to be
immaterial also may adversely affect the Company. Should any known
or unknown risks and uncertainties develop into actual events,
these developments could have material adverse effects on our
business, financial condition and results of operations.
This release contains time-sensitive information that reflects
management’s best analysis only as of the date of this release. The
Company does not undertake any obligation to publicly update or
revise any forward-looking statements to reflect future events,
information, or circumstances that arise after the date of this
release. Additional information regarding these risks can be found
in our Annual Report on Form 10-K for the period ended December 31,
2015.
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version on businesswire.com: http://www.businesswire.com/news/home/20160601006990/en/
Ferro CorporationInvestor Contact:John Bingle,
216-875-5411Treasurer and Director of Investor
Relationsjohn.bingle@ferro.comorMedia Contact:Mary Abood,
216-875-5401Director, Corporate
Communicationsmary.abood@ferro.com
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