Addition of digital technology leader with
patent-protected sales and increasing market penetration supports
Ferro’s leading position in glass markets
Ferro Corporation (NYSE: FOE, the “Company”), a leading global
provider of functional coatings and color solutions, today
announced that it has acquired Dip Tech Ltd. (“Dip-Tech”), a
leading provider of digital printing solutions for glass coatings.
Ferro paid $60.0 million, excluding customary adjustments and fees
for Dip-Tech, which is a privately held company headquartered in
Kfar Saba, Israel. The Company expects the transaction to be
accretive to earnings in 2018 based on year-one synergy-adjusted
EBITDA, which is forecasted to be in a range of $6 million to $7
million. Ferro expects a Return on Invested Capital of more than
15% within the first five years of the acquisition. The transaction
was funded through excess cash and borrowings under Ferro’s
existing revolving credit facility.
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Dip-Tech, acquired by Ferro Corporation,
provides digital printing technologies for a range of glass
applications with stringent functional requirements, such as
windshield and side glass used in the transportation and automotive
markets. (Photo: Business Wire)
Peter Thomas, Chairman, President and CEO of Ferro Corporation,
said, “This acquisition aligns very well with Ferro’s next phase of
our value creation strategy: Dynamic Innovation and Optimization.
It equips us with a fully commercialized and patent-protected
digital glass printing business that generates gross margins at the
high end of our Performance Colors & Glass portfolio.
Dip-Tech’s digital glass printing technology is attracting
customers because of the high-precision, multicolored effects
possible with durable glass-based inks, along with greater
production flexibility and efficiency.” (YouTube video highlighting
Dip-Tech technologies)
Mr. Thomas added, “Dip-Tech’s printing solutions and glass
coatings carry patent protection in all of its major markets. Their
technology know-how, along with their patent portfolio, is
unmatched in the industry. Our acquisition of Dip-Tech is a clear
demonstration of the culture of innovation that we are developing
at Ferro. We are pleased to welcome the Dip-Tech team to Ferro and
look forward to leading the way in digital glass technology
together.”
Ferro’s strong commercial presence in the global appliance,
architectural and automotive glass markets provides opportunities
for introducing Dip-Tech’s digital technology and for expanding
sales. Ferro believes that its strength in developing inks and
related raw materials, together with Dip-Tech’s technology, IP and
established global success, provide numerous operating and
commercial synergies.
Adjusted Earnings Before Interest, Taxes and Depreciation
(“EBITDA”)
Adjusted EBITDA for the transaction excludes the impact of
certain items, primarily associated with purchase accounting
adjustments, transaction-related expenses and acquisition
integration costs, restructuring activities, gains and losses on
asset sales concluded by the company being acquired, and other
adjustments to harmonize their accounting results to Ferro’s
standard accounting practices. It is not possible at this time to
identify the potential amount or significance of these items, as
they have not occurred yet. Therefore, the Company is unable to
reconcile the adjusted EBITDA guidance for the acquisition.
About Dip-Tech
Dip-Tech (www.dip-tech.com) is a pioneer in digital glass
printing and is the leading supplier of digital glass printers,
software and digital inks for the flat glass market. It complements
its technology with complete global technical, graphic, marketing,
and business support. With a strong history of business with the
world’s top glass designers and processors, and over 200 global
equipment installations, Dip-Tech’s digital glass printers are used
to produce millions of square meters of printed glass every
year.
Dip-Tech’s digital printing solutions are marketed and supported
through a network of direct marketing channels in Europe, the
United States, and the Asia-Pacific region, ensuring local
processors rapid response times and quality business development
support. An innovation leader in digital glass printing, Dip-Tech's
products are powered by a concentrated R&D program, the ongoing
development of ink nanotechnology and new printing technologies,
and patent protection across its portfolio.
About Ferro
Ferro Corporation (www.ferro.com) is a leading global supplier
of technology-based functional coatings and color solutions. Ferro
supplies functional coatings for glass, metal, ceramic and other
substrates and color solutions in the form of specialty pigments
and colorants for a broad range of industries and applications.
Ferro products are sold into the building and construction,
automotive, electronics, industrial products, household furnishings
and appliance markets. The Company’s reportable segments include:
Performance Coatings (metal and ceramic coatings), Performance
Colors and Glass (glass coatings), and Color solutions.
Headquartered in Mayfield Heights, Ohio, the Company has
approximately 5,230 associates globally and reported 2016 sales of
$1.15 billion.
Cautionary Note on Forward-Looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of federal
securities laws. These statements are subject to a variety of
uncertainties, unknown risks, and other factors concerning the
Company’s operations and business environment. Important factors
that could cause actual results to differ materially from those
suggested by these forward-looking statements and that could
adversely affect the Company’s future financial performance include
the following:
- demand in the industries into which
Ferro sells its products may be unpredictable, cyclical, or heavily
influenced by consumer spending;
- Ferro’s ability to successfully
implement and/or administer its optimization initiatives, including
its restructuring programs, and to produce the desired
results;
- currency conversion rates and economic,
social, political, and regulatory conditions in the U.S. and around
the world;
- Ferro’s ability to identify suitable
acquisition candidates, complete acquisitions, effectively
integrate the businesses and achieve the expected synergies
(including, but not limited to, the Dip-Tech, Cappelle Pigments,
Electro-Science Laboratories, Delta Performance Products, Pinturas
Benicarló, Ferer, Al Salomi, Nubiola and Vetriceramici
transactions), as well as the acquisitions being accretive and
Ferro achieving the expected returns on invested capital;
- the effectiveness of the Company’s
efforts to improve operating margins through sales growth, price
increases, productivity gains, and improved purchasing
techniques;
- Ferro’s ability to successfully
introduce new products or enter into new growth markets;
- the impact of interruption, damage to,
failure, or compromise of the Company’s information systems;
- restrictive covenants in the Company’s
credit facilities could affect its strategic initiatives and
liquidity;
- Ferro’s ability to access capital
markets, borrowings, or financial transactions;
- the availability of reliable sources of
energy and raw materials at a reasonable cost;
- increasingly aggressive domestic and
foreign governmental regulations on hazardous materials and
regulations affecting health, safety and the environment;
- competitive factors, including intense
price competition;
- Ferro’s ability to protect its
intellectual property, including trade secrets, or to successfully
resolve claims of infringement brought against it;
- sale of products and materials into
highly regulated industries;
- the impact of operating hazards and
investments made in order to meet stringent environmental, health
and safety regulations;
- limited or no redundancy for certain of
the Company’s manufacturing facilities and possible interruption of
operations at those facilities;
- management of Ferro’s general and
administrative expenses;
- Ferro’s multi-jurisdictional tax
structure and its ability to reduce its effective tax rate,
including the impact of the Company’s performance on its ability to
utilize significant deferred tax assets;
- the effectiveness of strategies to
increase Ferro’s return on invested capital, and the short-term
impact that acquisitions may have on return on invested
capital;
- stringent labor and employment laws and
relationships with the Company’s employees;
- the impact of requirements to fund
employee benefit costs, especially post-retirement costs;
- implementation of new business
processes and information systems, including the outsourcing of
functions to third parties;
- risks associated with the manufacture
and sale of material into industries making products for sensitive
applications;
- exposure to lawsuits in the normal
course of business;
- risks and uncertainties associated with
intangible assets;
- Ferro’s borrowing costs could be
affected adversely by interest rate increases;
- liens on the Company’s assets by its
lenders affect its ability to dispose of property and
businesses;
- Ferro may not pay dividends on its
common stock in the foreseeable future;
- amount and timing of any repurchase of
Ferro’s common stock; and
- other factors affecting the Company’s
business that are beyond its control, including disasters,
accidents and governmental actions.
The risks and uncertainties identified above are not the only
risks the Company faces. Additional risks and uncertainties not
presently known to the Company or that it currently believes to be
immaterial also may adversely affect the Company. Should any known
or unknown risks and uncertainties develop into actual events,
these developments could have material adverse effects on our
business, financial condition and results of operations.
This release contains time-sensitive information that reflects
management’s best analysis only as of the date of this release. The
Company does not undertake any obligation to publicly update or
revise any forward-looking statements to reflect future events,
information, or circumstances that arise after the date of this
release. Additional information regarding these risks can be found
in our Annual Report on Form 10-K for the period ended December 31,
2016.
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version on businesswire.com: http://www.businesswire.com/news/home/20170802005639/en/
Ferro CorporationInvestor Contact:Kevin Cornelius
Grant, 216-875-5451Head of Investor
Relationskevincornelius.grant@ferro.comorMedia Contact:Mary
Abood, 216-875-5401Director, Corporate
Communicationsmary.abood@ferro.com
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