Ferro to go private in $2.1 billion deal

The coatings and colorants maker Ferro has agreed to be taken private by the investment firm American Securities and combined with two companies that American Securities also owns.

Cleveland-based Ferro will be purchased by Prince International, one of the two companies, in a transaction that values Ferro at about $2.1 billion. Prince will buy Ferro’s outstanding stock for $22 per share, a premium of about 25% over Ferro’s closing price on May 10, the day before the deal was announced.

Ferro had sales last year of $959 million, primarily of coatings for glass, metal, and ceramics and of specialty pigments and colorants. Prince is a producer of inorganic materials, including enamels for metal coating and colorants for brick and tile.

American Securities will combine the enlarged Prince with Chromaflo Technologies, a provider of colorant technology that the investment firm also owns. Joining the three firms will result in a company with annual sales of about $2 billion, Prince says.

In a statement, Prince CEO D. Michael Wilson says merging Prince, Ferro, and Chromaflo will create a company with “unmatched competencies in particle engineering, glass science and color technology.”

The deal marks a return to prominence for Wilson, who resigned in March 2020 as CEO of the chemical maker Ingevity over what the company termed “matters relating to his personal conduct.” Wilson became CEO of Prince in November 2020.

John P. McNulty, a stock analyst at BMO Capital Markets, told clients in a report that the takeover doesn’t surprise him, given Ferro’s recent sale of its slow-growing tile coatings business. Ferro reportedly turned down offers from private investors in 2016, McNulty says, but after the tile coatings sale, the firm was an even more attractive acquisition target.

The purchase will remove one more US chemical company from the stock market. Last month, W. R. Grace agreed to be taken private by the industrial company Standard Industries in a $7 billion transaction. And last year, the phosphorus chemical maker Innophos was purchased by One Rock Capital Partners for close to $1 billion.