Victrex PLC
17 November 1999
The issuer has advised that the following alteration should be made to the
VICTREX PLC's 'ACQUISITION, etc.' announcement released today at 07:01 under
RNS No 9641A.
Details of Change:
The name of the Company's product was incorrectly referred to as PEEKT in the
announcement. The correct name is 'PEEK'. All references to the word 'PEEKT'
in the announcement are hereby amended to read 'PEEK'.
The full corrected version is shown below.
Acquisition of Raw Material Manufacturing Business
from Laporte
Victrex plc today announces that it has agreed to purchase the DFDPM
manufacturing business of Laporte plc for cash for a price of £17.6 million
plus stocks estimated at £2.3 million. The transaction is a key strategic
move for Victrex to secure its raw material supplies and will underpin future
growth and provide financial benefits in the medium term.
This business is the principal commercial source in the world of DFDPM, the
primary step in the two stage process for the production of BDF, the raw
material from which PEEK is manufactured. The secondary step in the
production of BDF is the oxidation of DFDPM, which will be provided by Laporte
as part of a 50/50 joint venture for the overall supply of BDF.
The joint venture agreement will start on 1st January 2000 and will run for a
minimum of 7 years. The purchase of the DFDPM business and the new agreement
will supersede the current arrangements which would have expired at the end of
2001.
Details of proposed transaction
Under the terms of the agreement, Victrex will purchase the fixed assets of
the DFDPM business of £6 million, comprising plant and machinery at Laporte's
Rotherham site. In addition it will purchase know-how along with goodwill for
£11.6 million. Victrex will also purchase raw materials, work-in-progress and
stock relating to the DFDPM business at completion at cost for an amount
currently estimated at £2.3 million.
The consideration will be funded from increased bank borrowings.
The current plant capacity at Rotherham should be sufficient, with limited
additional investment, to supply the predicted capacity requirements of
Victrex's existing PEEK plant.
The 50/50 joint venture company will be established by Victrex and Laporte for
procuring manufacture of BDF and both shareholders will have equal Board
representation. Profits from the manufacture of BDF will be shared equally
between the joint venture shareholders following some initial transitional
arrangements. The joint venture will receive DFDPM from Victrex, procure the
oxidation from Laporte and sell the finished BDF on to Victrex. In addition
Laporte will also enter into a 7 year agreement with Victrex for the supply of
all fluoroboric acid needed for the production of DFDPM.
Financial effects
Victrex expects earnings per share, after amortisation of goodwill, to be
marginally reduced in the current financial year and neutral in the following
year. Thereafter, as sales volumes grow, the deal becomes increasingly
earnings enhancing. Victrex has always pursued a core strategy of growing its
development pipeline for PEEK applications. As the results of this strategy
are realised, the financial benefits of this transaction will become
increasingly significant.
The assets of the Rotherham business, including know-how and goodwill, will be
consolidated on Victrex's balance sheet at completion. Victrex plans to
account for the joint venture in its consolidated accounts using the
proportional consolidation accounting method as outlined in FRS 9.
Victrex's preliminary results for the year to 30th September 1999 will be
announced on Wednesday 8th December 1999.
David Hummel, Chief Executive of Victrex plc, commented:
'The transaction is a crucial strategic step for Victrex in securing
competitive long term supply of the key raw material for PEEK and in
supporting the future growth prospects of our business.'
For further information, please contact:
Victrex plc
David Hummel 17th Nov 1999: 0171 357 9477
Chief Executive
David Tilston Thereafter: 01253 897700
Finance Director
Hogarth Partnership 0171 357 9477
Nick Denton / John Olsen
Notes to Editors
1. Victrex is the UK based international high performance
materials group quoted on the London Stock Exchange.
It is the sole manufacturer of the PEEK polymer
brand, a unique high performance plastic, with major
markets in USA, Europe and Asia Pacific.
2. PEEK has a unique combination of properties, with
exceptional chemical, wear, electrical and temperature
resistance, as well as dimensional stability,
biocompatibility and mouldability. These properties
enable engineers to produce cost-effective designs for
critical applications in such diverse markets as the
industrial, transportation, electronics, food and
medical sectors.
3. DFDPM is the key intermediate product in the
production of BDF. Currently, Laporte supplies
fluoroboric acid to its Rotherham plant which
manufactures DFDPM. It then converts DFDPM into BDF
by further processing at its site at Seal Sands,
Cleveland. Victrex then purchases the BDF from
Laporte and uses it in the production of PEEK.
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy
To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.