EXHIBIT 99.1
Arch Chemicals, Inc.
501 Merritt 7
P.O. Box 5204
Norwalk, CT 06856
Investor Contact: Mark E. Faford (203) 229-2654
Press Contact: Dale N. Walter (203) 229-3033
ARCH CHEMICALS, INC. TO ACQUIRE BIOCIDES BUSINESS
ACQUISITION STRENGTHENS ARCH'S POSITIONS IN WATER
TREATMENT AND INDUSTRIAL BIOCIDES
NORWALK, CT, March 4, 2004 -- Arch Chemicals, Inc. (NYSE: ARJ) announced that
it has signed a definitive agreement to acquire Avecia's Biocides business,
which is comprised of a Pool & Spa business and a Protection & Hygiene
business, for approximately $210 million. The transaction, which is subject to
regulatory approvals and other customary closing conditions, is expected to
close near the end of the first quarter.
"These two businesses strengthen the core of our portfolio. They will greatly
complement Arch's existing capabilities in water treatment and industrial
biocides and present us with many exciting synergies," said Arch Chemicals'
Chairman, President and CEO Michael E. Campbell. "The acquisition of the Pool
& Spa business will rapidly accelerate our participation in the specialty pool
and spa dealer channel and will strongly signal our commitment to this vital
group of customers," he added. "Also, the Protection & Hygiene business
provides the opportunity for Arch to expand our product offerings, enter into
the health and hygiene customer segment and broaden our global toxicology and
environmental-fate capabilities."
POOL & SPA BUSINESS
With its BAQUACIL(R), BAQUA Spa(R) and related brand products, the Pool & Spa
business is a leader in providing alternatives to chlorine-based sanitizers
for swimming pools and spas. Pool &
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Spa sales are principally concentrated in North America, and those sales are
exclusively through specialty pool and spa dealers, who account for an
estimated two-thirds of all pool chemical sales in North America.
PROTECTION & HYGIENE BUSINESS
The Protection & Hygiene business is a leading, global supplier of biocides
for the industrial and consumer segments of the biocides market. This business
develops, manufactures and markets biocides which are largely used in
anti-bacterial applications. Protection & Hygiene sales are primarily
concentrated in North America and Western Europe. The business is built around
two well established, market-leading molecules and offers products under
various strong brand names, such as PROXEL(R), VANTOCIL(R) and DENSIL(R). In
addition, the business markets a consumer hygiene treatment under the brand
name PURISTA(R).
The two businesses combined employ about 290 people worldwide and had combined
sales of approximately $137 million in 2003. Their primary manufacturing
centers are located in the United Kingdom, with additional toll manufacturing
and customer support capabilities worldwide.
Paul J. Craney, Executive Vice President and General Manager of Arch's
Treatment Products segment, said, "With the addition of the Pool & Spa
products to our own POOLIFE(R) brand of products for exclusive sale by
dealers, we can offer dealers and their customers a comprehensive range of
pool care products and accessories that should satisfy their every need. We're
also very excited to add their well-established and growing family of products
tailored for use in spas." Commenting on the Protection & Hygiene business,
Mr. Craney added, "In addition to giving us more products for industrial
markets such as mineral slurries, polymer emulsions and in-can coatings
preservation, this acquisition will offer something Arch didn't have --
biocides tailored for, and application expertise in, consumer-focused health
and hygiene products. These end uses include clothing and linen hygienic
protection, industrial sanitizers, household cleaning and laundry products as
well as health care products."
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The total acquisition cost is approximately $210 million, comprised of $200
million in cash and 446,500 shares of Arch common stock. The agreement also
includes working capital and fixed asset adjustments and a $5 million
contingent payment based upon future performance of the acquired businesses.
The acquisition is expected to be cash and earnings accretive in 2004,
excluding synergies. Arch will finance the cash portion of the acquisition
from borrowings under the Company's existing revolving credit facility. In
connection with the pending acquisition, the Company amended certain quarterly
leverage and debt to total capitalization ratios for 2004, which coincide with
periods of the Company's peak borrowings for the seasonal working capital
requirements of its Treatment Products segment.
Mr. Campbell concluded, "We are extremely pleased that these businesses will
become part of Arch and look forward to realizing the potential of this
winning combination. The businesses' managerial philosophy and culture are
similar to those of Arch. These similarities will facilitate the success of
our detailed plan to efficiently integrate the two organizations and rapidly
capitalize on the cost synergies and growth opportunities we have identified."
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Headquartered in Norwalk, Connecticut, Arch Chemicals, Inc. is a global
specialty chemicals company with $1 billion in annual sales. Together with its
subsidiaries, Arch has 3,000 employees and manufacturing and customer support
centers in North America, South America, Europe, Asia and Africa. Arch and its
subsidiaries have leadership positions in three business segments -- Treatment
Products, Microelectronic Materials and Performance Products -- and they serve
leading customers in these markets with forward-looking solutions to their
chemical needs. For more information, visit www.archchemicals.com.
o Listen in live to Arch Chemicals' conference call to discuss the
acquisition on Thursday, March 4, 2004 at 11:00 a.m. (ET) at
http://www.archchemicals.com.
o If members of the public wish to access Arch's live conference call in a
listen-only mode, dial: (800) 299-8538, access number 49957275, in the
United States or (617) 786-2902, access number 49957275, outside the
United States.
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o A telephone replay will be available from 1:00 p.m. on Thursday, March
4, 2004 until 6:00 p.m. (ET) on Thursday, March 11, 2004. The replay
number is (888) 286-8010, access number 29288005; from outside the United
States, please call (617) 801-6888, access number 29288005.
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Except for historical information contained herein, the information set forth
in this communication contains forward-looking statements that are based on
management's beliefs, certain assumptions made by management and management's
current expectations, estimates and projections about the markets and economy
in which Arch and its various businesses operate. Words such as "anticipates,"
"believes," "estimates," "expects," "forecasts," "opines," "plans,"
"predicts," "projects," "should," "targets," "will," and variations of such
words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions ("Future Factors"), which
are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expected or forecasted in such forward-looking
statements. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of future events, new
information or otherwise. Future Factors which could cause actual results to
differ materially from those discussed include but are not limited to: general
economic and business and market conditions; lack of economic recovery in 2004
in the U.S.; lack of moderate growth or recession in European economies;
increases in interest rates; economic conditions in Asia; worsening economic
and political conditions in Venezuela; strengthening of the U.S. dollar
against foreign currencies; customer acceptance of new products; efficacy of
new technology; changes in U.S. laws and regulations; increased competitive
and/or customer pressure; the Company's ability to maintain chemical price
increases; higher-than-expected raw material costs for certain chemical
product lines; increased foreign competition in the calcium hypochlorite
markets; lack of continued recovery in the semiconductor industry; unfavorable
court, arbitration or jury decisions; the supply/demand balance for the
Company's products, including the impact of excess industry capacity; failure
to achieve targeted cost-reduction programs; unsuccessful entry into new
markets for electronic chemicals; capital expenditures in excess of those
scheduled; environmental costs in excess of those projected; the occurrence of
unexpected manufacturing interruptions/outages at customer or company plants;
reduction in expected government contract orders and/or the failure to renew
or extend the U.S. government contract for hydrazine propellants; unfavorable
weather conditions for swimming pool use; inability to expand sales in the
professional pool dealer market; and gains or losses on derivative
instruments.
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