Hercules Announces Agreement to Sell the Water Treatment Business of BetzDearborn
13-Feb-2002
Wilmington, DE, February 12, 2002 . . . Hercules Incorporated
announced today that it 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.
Aqualon is a world leader in managing the properties of water-based
systems. The Pulp and Paper Division is the largest and most technically advanced supplier
of functional, process and water treatment chemical programs for the pulp and paper
industry. FiberVisions is the world’s leading producer of polypropylene staple fibers
for hygiene markets. The Rosins and Terpenes businesses produce specialty resins for
adhesives and food and beverage applications.
BetzDearborn is a global water treatment service company emphasizing a
total solutions approach to helping customers increase productivity, reduce operating
costs, and meet environmental goals. The Water Treatment business has approximately $1
billion in annual sales, 3600 employees worldwide and 2001 EBITDA (earnings before
interest, taxes, depreciation and amortization) of $217 million.
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