Ferro Reveals Strategic Actions To Advance Value Creation Strategy; Updates View

(RTTNews) - Ferro Corp. (FOE) unveiled three strategic actions to advance its value creation strategy.

The company has agreed to sell substantially all of its assets in Specialty Plastics business to A. Schulman, Inc. (SHLM) for $91 million cash. The transaction includes assets such as Ferro's plastics manufacturing sites in Stryker, Ohio; Evansville and Plymouth, Indiana; Carpentersville, Illinois; and its plastics operations in Castellon, Spain. Specialty Plastics assets not included in the sale are Ferro's liquid colorants and dispersions business in Edison, New Jersey, and its Specialty Plastics operations in Venezuela.

The firm anticipates that cash proceeds, net of cash taxes and fees, from this sale would total nearly $87 million, which it intends to use to reduce debt. The sale may close early in the third quarter of 2014. The firm is being advised on the Specialty Plastics transaction by Lazard and Jones Day.

In addition, Ferro has introduced a process to market its Polymer Additives business and has retained KeyBanc Capital Markets to advise on the transaction.

Further, Ferro announced plans to refinance its debt to reduce interest and enhance strategic flexibility. Accordingly, it plans to refinance the existing $250 million 7.875% Senior Notes due in 2018 with long-term debt and is in negotiations with its bank group to refinance its revolving credit facility. The company expects the refinancing to be completed over the next 60 days. J.P. Morgan Securities LLC, PNC Capital Markets LLC and BofA Merrill Lynch are assisting with the refinancing activities.

Giving effect for the anticipated divestitures and the debt refinancing, Ferro said it is revising its 2014 and 2015 guidance. As such, revised adjusted earnings per share guidance for 2014 is now $0.48 - $0.53. For 2015, it expects adjusted earnings to exceed $0.80 per share.