Yule Catto has acquired its largest competitor in a deal worth £376m, roughly equal to the FTSE 250 chemical group's own market value before the announcement. To help finance this, it has announced a £225m rights issue at 116p per share - a 61 per cent discount to the current share price.
The target, PolymerLatex, is based in Germany but currently owned by the London private-equity group TowerBrook Capital. It operates in many of the same markets as Yule Catto's core Polymer Chemicals division: water-based polymers for goods like paint, glue, carpet backing and latex protective gloves. Yule Catto was already the global market leader in a number of these niches; PolymerLatex’s manufacturing plants and client-list should reinforce and diversify that leadership - assuming the chemistry between the two groups works out.
