Thursday, July 14, 2005 | 9:27 a.m.
BLOOMBERG NEWS
American Pacific Corp., which makes rocket propellant, agreed to buy GenCorp Inc.'s Aerojet Fine Chemicals unit for $119 million to enter the pharmaceuticals ingredients business.
American Pacific, based in Las Vegas, will pay $100 million in cash and a $19 million note, Sacramento-based GenCorp said today in a statement. GenCorp's fine-chemicals business had sales last year of $66 million, more than American Pacific's total sales of $59.5 million. The transaction is scheduled to close in about three months, the companies said.
GenCorp, founded in 1915 as General Tire & Rubber Co., is selling the unit to focus on aerospace and defense products, and Northern California real estate, spokeswoman Linda Cutler said. The fine-chemicals unit provides American Pacific with a presence in "fast growing" pharmaceutical markets, Chief Executive John R. Gibson said.
"It is an attractive, profitable business that complements our existing specialty chemical and energetic product portfolio," Gibson said.
Shares of American Pacific rose 55 cents, or 6.8 percent, to $8.70 at 1:52 p.m. in Nasdaq stock market trading. GenCorp gained 45 cents, or 2.3 percent, to $19.80 in New York Stock Exchange composite trading.
Aerojet Fine Chemicals makes active drug ingredients and intermediates used in the treatment of cancer, epilepsy, viruses and central nervous-system disorders, Cutler said. GenCorp in August sold its GDX Automotive unit for $147 million to New York- based Cerberus Capital Management LP.
GenCorp said it plans to use the proceeds to reduce debt.
(American Pacific will hold a conference call at 4 p.m. New York time at (1) (973) 935-2408 or http://www.apfc.com.)
--Editor: J. Norton, McKiernan
To contact the reporter on this story: Jack Kaskey in New York (1) (212) 617-8786 or jkaskeybloomberg.net.
To contact the editor responsible for this story: Steve Stroth at (1) (312) 692-3738 or sstrothbloomberg.net.
-0- Jul/13/2005 17:53 GMT
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