Rhodia Downbeat Despite McIntyre Deal
French chemicals group Rhodia struck a downbeat note for its 2009 results as it announced the acquisition of McIntyre, a privately-held US company with estimated 2008 sales of $146m.
Chief executive Jean-Pierre Clamadieu told French newspaper La Tribune that Rhodia had paid around $100m for McIntyre Group Ltd, which makes surfactants, polymers, chemical specialities and cosmetic preservatives.
McIntyre is based near Chicago and has about 200 staff.
Rhodia said it expected major synergies from cross-selling opportunities and hoped to double the EBITDA (earnings before interest, tax, depreciation and amortisation) of McIntyre by 2011.
"This 'bolt-on' acquisition is an additional illustration of our well-established strategy to deliver profitable growth in activities where we have leading positions. It will reinforce our presence in innovative markets which are largely resistant to economic downturns," Clamadieu said in a statement.
"Poor" visibility on results
Rhodia returned to profit in 2006 following years of restructuring and the company has kept a tight control on its costs in recent years.
However, in December the company cut its 2008 core earnings target as the global economic slowdown caused a decline in demand for its products in several of its markets.
Clamadieu said in an interview due to appear in Tuesday's edition of La Tribune that visibility for its 2009 results was "poor."
Asked how its fourth quarter results were so far, Clamadieu replied: "It is difficult to give precise indications in such a turbulent environment."
"We think that the first quarter will be mediocre and we are not too optimistic over the second quarter. The question is whether the economic recovery will take place this summer or only in 2010."
Clamadieu said the company could step up cost cuts if the economic climate remained difficult.
Rhodia shares closed down 2.5% at €4.76, giving the company a market capitalisation of around €480m ($643.3m). The stock has risen around 6% since the start of 2009, having fallen 83% last year.
By Sudip Kar-Gupta, Reuters. (www.chemicals-technology.com)
Chief executive Jean-Pierre Clamadieu told French newspaper La Tribune that Rhodia had paid around $100m for McIntyre Group Ltd, which makes surfactants, polymers, chemical specialities and cosmetic preservatives.
McIntyre is based near Chicago and has about 200 staff.
Rhodia said it expected major synergies from cross-selling opportunities and hoped to double the EBITDA (earnings before interest, tax, depreciation and amortisation) of McIntyre by 2011.
"This 'bolt-on' acquisition is an additional illustration of our well-established strategy to deliver profitable growth in activities where we have leading positions. It will reinforce our presence in innovative markets which are largely resistant to economic downturns," Clamadieu said in a statement.
"Poor" visibility on results
Rhodia returned to profit in 2006 following years of restructuring and the company has kept a tight control on its costs in recent years.
However, in December the company cut its 2008 core earnings target as the global economic slowdown caused a decline in demand for its products in several of its markets.
Clamadieu said in an interview due to appear in Tuesday's edition of La Tribune that visibility for its 2009 results was "poor."
Asked how its fourth quarter results were so far, Clamadieu replied: "It is difficult to give precise indications in such a turbulent environment."
"We think that the first quarter will be mediocre and we are not too optimistic over the second quarter. The question is whether the economic recovery will take place this summer or only in 2010."
Clamadieu said the company could step up cost cuts if the economic climate remained difficult.
Rhodia shares closed down 2.5% at €4.76, giving the company a market capitalisation of around €480m ($643.3m). The stock has risen around 6% since the start of 2009, having fallen 83% last year.
By Sudip Kar-Gupta, Reuters. (www.chemicals-technology.com)
