Hercules Incorporated has entered into an agreement to sell the Water Treatment business of its BetzDearborn Division to GE Specialty Materials, a unit of General Electric Company.
The Paper Process Chemicals business, approximately one-third of the BetzDearborn company purchased by Hercules in 1998, will remain with Hercules. In addition, Hercules will have an agreement with GE to distribute and service BetzDearborn's water treatment products to the pulp and paper industry. This transaction is subject to regulatory and other customary approvals, and is expected to close in spring 2002.
The purchase price is $1.8 billion in cash, with net after tax proceeds available for debt reduction of approximately $1.665 billion.
"This transaction is extremely significant for our Company and all our constituents including customers, employees, and shareholders," said Dr. William H. Joyce, Chairman and Chief Executive Officer of Hercules. "Last year, the Company was in a difficult financial situation, carrying too much debt. A corporate-wide work process program to reduce costs has made the debt manageable and all of our businesses more valuable.
The sale of the water treatment business is the second step in the program and will sharply reduce our debt and permit us to better support the corporation's remaining businesses and enhance shareholder value from a position of strength."
Since January 2001, from this and other transactions, the Company will have received net proceeds of approximately $2 billion enabling us to reduce debt. With greater financial flexibility Hercules will now focus on the future of its remaining businesses. These include Aqualon, Pulp and Paper (including the retained BetzDearborn Paper Process chemical products acquired in 1998), FiberVisions, and Rosins and Terpenes.
Source: Hercules, Inc.