Rohm and Haas says LeaRonal will strengthen growth opportunities for Shipley

Citation

(1999), "Rohm and Haas says LeaRonal will strengthen growth opportunities for Shipley", Circuit World, Vol. 25 No. 3. https://doi.org/10.1108/cw.1999.21725cab.012

Rohm and Haas says LeaRonal will strengthen growth opportunities for Shipley

Europe

Rohm and Haas says LeaRonal will strengthen growth opportunities for Shipley

Keywords Acquisition, LeaRonal, Rohm and Haas

On December 21 Rohm and Haas Company announced the acquisition of LeaRonal, Inc. Freeport, New York, in a move to enhance opportunities for growth in the printed circuit board segment of the fast-growing electronic materials market. The value of the transaction is approximately $460 million. LeaRonal will be combined with Shipley Company, the cornerstone of Rohm and Haas's Electronic Materials business group.

"The compatibility of the product lines, the complementary distribution of geographic business and the cultural similarities of the firms make LeaRonal a wonderful fit with Shipley and an excellent next step in the development of our Electronic Materials business", said Rajiv L. Gupta, vice-chairman elect of Rohm and Haas and head of Electronic Materials.

He continued, "LeaRonal is a gem of a firm, a growing international company with cutting-edge, patented technology and a strong entrepreneurial spirit, similar in many respects to Shipley Company". Gupta said LeaRonal's plating-through-hole chemistry is an excellent fit with Shipley's technology for similar markets. Just as important, LeaRonal brings new technology for electroplating, solder mask and final finish technology for the printed circuit board industry; high-technology packaging processes for the semiconductor industry and electronic connector plating processes. The combined operations, which will become the Shipley Ronal division of Shipley Company and will have a stronger geographic presence, particularly in the important Asia-Pacific Region. The managements of both firms will work together to create an organization geared for growth", said Gupta.

Shipley Ronal will leverage common assets, operations, sales and technical organizations so that it can reduce costs even as the product range is broadened. "We are positioning this business to take advantage of synergies that would not be possible as two separate companies", commented Gupta. "Together we will offer our customers enhanced research and development capabilities, an expanded product line, and best-in-class service and achieve our goal of strong top-line growth.

Rohm and Haas will soon commence a cash tender offer for all the outstanding common shares of LeaRonal at $34 per share. Following the realisation of the tender offer, which was expected to be completed in January 1999, Rohm and Haas will acquire through a merger all shares not purchased in the tender offer at the same price. The boards of directors of both firms approved the transaction, which is expected to increase the sales of the electronic materials business group by 60 percent, to more than $640 million per year. The transaction should be accredited to Rohm and Haas earnings in 2000.

Holders of approximately 30 percent of outstanding LeaRonal shares have agreed to tender their shares and have granted Rohm and Haas an option to purchase those shares.

In addition to Shipley, Rohm and Haas's $400 million electronics materials business includes a minority stake in Rodel, Inc., the market leader in chemical mechanical polishing (CMP) technology, and the majority position in a joint venture between Shipley and LG Chemical in Korea.

Gupta pointed out that the proposed acquisition of LeaRonal significantly accelerates Rohm and Haas's strategic plans to double the size of its electronic materials business. In 1997, electronic materials represented approximately 10 percent of overall Rohm and Haas sales of about $4 billion. He would like to see that figure climb to 20 percent by 2001. "One of the key trends in the electronics industry is consolidation", he said. "As that happens, there is increased pressure to deal with substantial organizations. Rohm and Haas's portfolio of electronics materials businesses is growing in size while staying at the cutting edge of technology. This combination is hard to beat".