Platform’s Buying Spree Continues

Platform Specialty Products has reached a $2.3 billion deal to acquire U.K.-based Alent, a maker of specialty chemicals and materials for electronic, automotive, and industrial applications. Cevian Capital, a private equity firm that owns a 22% stake in Alent, has agreed to support the deal.

The acquisition is the latest in a series of six large deals totaling $9.4 billion that Platform has arranged since it was formed two years ago. Some observers wonder if Platform can keep up its hectic acquisition pace, maintain its credit rating, and integrate the operations it has acquired without losing business discipline.

Alent will augment two earlier Platform acquisitions in electronics and related materials: MacDermid, which was its first deal in October 2013, and OM Group’s electronic materials and photomasks operations, which it is currently buying. Platform paid nearly $2.2 billion for the two.

Alent, until 2012 the electronic materials division of Cookson Group, consists of two parts: Enthone, a supplier of electroplating chemistries, and Alpha, a producer of interconnect materials such as solder. In 2014 the two units racked up combined sales of $413 million and an operating profit of $157 million.

Martin E. Franklin, founder and chairman of Platform, says the latest acquisition “marks a further step in the Platform strategy of building a portfolio of best-in-class ‘asset-lite, high-touch’ businesses in the specialty chemical industry.”

Platform’s other acquisitions were of three agricultural chemical formulators—Arysta LifeScience, Agriphar, and Chemtura’s AgroSolutions business—bought for a total of $4.9 billion. Franklin’s plan for Platform also includes coatings, water treatment, and flavors and fragrances businesses.

As Lori Harris, a debt analyst with Moody’s Investors Service, sees it, the size and pace of acquisition is increasing demands on management to integrate businesses it has already acquired. If Platform uses too much debt to finance the Alent acquisition, she adds, it risks having its “speculative” grade rating lowered.

Harris expects Platform to focus on debt reduction to offset the risk and on integrating functions such as sales, administration, and raw materials purchasing to reduce costs.