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Cytec Industries Inc
Forbo Holding AG (FORN), the Swiss maker of floor coverings, abandoned a sale of the remnants of its adhesives business after talks with potential suitors ended.
Forbo evaluated the strategic options and pursued talks with interested parties in the business, which has annual sales of 100.4 million francs ($105 million), the Baar-based company said today. It plans to keep construction-adhesives within the group over the long term, spokeswoman Karin Marti said.
Chief Executive Officer This Schneider has largely dismantled the once 1,400-worker strong bonding division, selling an industrial-adhesives unit to H.B. Fuller in March for 370 million francs. The CEO now considers having construction- glues sitting within the related flooring business as the best way forward, though the situation could still be revisited at a later date, according to Marti.
“Strategically it’s wrong to keep the adhesives business as scale is missing and investments are probably required,” said Serge Rotzer, an analyst at Bank Vontobel in Zurich in a note to clients. “Better times should probably come back for a disposal.”
Forbo initiated a structured sale process in February with Credit Suisse (CSGN) as financial adviser and Baker & Mckenzie as legal adviser. Schneider declined to provide information on the bidders. Credit Suisse also advised Forbo on the HB Fuller deal.
Adhesive makers are consolidating to build scale and expand their operations globally, with Henkel AG (HEN3) last month agreeing to buy an adhesives operation from Cytec Industries Inc. (CYT) for $105 million.
An additional litmus test to gauge investor interest in construction chemicals will be Wendel SA (MF)’s possible sales of aluminates and admixtures units, valued at a potential 1 billion euros ($1.3 billion). Sale processes are ongoing, people with knowledge of the situation have said.
Forbo’s construction adhesives unit has 270 employees and its main markets are the Benelux region, Germany, Russia, and eastern Europe. Production facilities are located in the Netherlands, Germany, and Russia, Forbo said.
“We see a good potential of stepping up cooperation with the flooring systems division in systems solutions, for example additional flooring-related equipment and accessories,” Marti said.
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