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Ashland Inc. To Acquire Hercules Inc. For 1.22 Times Revenue

August 5, 2008

By Anonymous

The Deal; Ashland Inc. has agreed to purchase Hercules Inc. for about $2.6 billion in a cash and stock transaction. Under the terms of the deal, Ashland will pay S 18.60 in cash plus 0.093 shares of its stock in exchange for each share of Hercules. Based on recent closing prices, the deal values Hercules at $23.01 per share. Ashland will also assume certain Hercules debt, bringing the total deal value to around $3.3 billion. The companies expect the deal to close by the end of 2008. Discussion: Hercules Inc. produces a range of chemical products. Company products include wood and gum rosin resins for adhesives and construction materials, water-treatment and functional performance chemicals used in the pulp and paper industry, and thickeners for water-based items such as latex paints, printing inks, and oral hygiene products.

Ashland Inc. is a chemicals company that operates in four business segments. The company makes specialty resins, polymers, and adhesives, provides chemical and non-chemical products for water treatment, buys and distributes chemicals and plastics, and produces and markets Valvoline brand motor oil.

The acquisition of Hercules will give Ashland a major presence in the pulp and paper sector of the water treatment market. The deal increases Ashland’s portfolio of of specialty adhesives and ingredients.

Copyright NVST, Inc. Jul 21, 2008

(c) 2008 Weekly Corporate Growth Report. Provided by ProQuest Information and Learning. All rights Reserved.




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