Solutia and Southwall Technologies have signed a definitive agreement, which will see Solutia buy Southwall for US$13.60 per share of Southwall’s common stock in cash. Both companies board of directors have approved of the deal, which holds an aggregate equity purchase price of nearly US$133 million. Solutia advised that it would fund the transaction from existing cash on hand.
By acquiring Southwall, Solutia has secured access to the company’s XIR technology as well as adding manufacturing capacity and proprietary capabilities to its portfolio. The agreement is expected to see a subsidiary of Solutia begin a tender offer for all of the outstanding shares of Southwall common stock no later than October 25.
Southwall stockholders will receive US$13.60 per share in cash for all outstanding shares of the company’s common stock under the offer by Solutia. This represents a 45% premium to the closing price per share of Southwall common stock on October 6. The closing of the offer is conditional on the customary terms and conditions, including the tender of a majority of the outstanding shares of Southwall and the delivery of regulatory approvals.
“This acquisition positions Solutia as the world leader in advanced sputtering technology, combining the industry's leading commercial expertise with next-generation innovation capabilities to provide advanced film solutions to the premium window film and electronics markets,” said Jeffry Quinn, chairman, president and chief executive officer of Solutia. “Our growth strategy remains focused on enhancing our portfolio through synergistic bolt-on acquisitions that allow Solutia to better serve high-growth markets and support the success of our existing businesses. This is just one component of our strategy to put our strong cash flow to work to create value for our shareholders.”
Once the tender offer and stockholder approval, if necessary, is completed the agreement will see Southwall merge with a subsidiary of Solutia and become a wholly-owned subsidiary of the company. The tender offer is expected to be finalized in the fourth quarter.