Grace goes private in $7bn deal with Standard Industries Holdings

July 2021 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

July 2021 Issue

In a deal which takes the global specialty chemical firm private, W. R. Grace & Company is to be acquired by privately-held global industrial company Standard Industries Holdings in a deal valued at $7bn.

Under the terms of the definitive agreement, Standard Industries Holdings will acquire all of the outstanding shares of Grace common stock for $70 per share in an all-cash transaction, which includes Grace’s pending pharma fine chemistry acquisition.

“We are thrilled to welcome Grace to the Standard Industries family,” said David Millstone and David Winter, co-chief executives of Standard Industries Holdings. “We look forward to working with its exceptional team to usher in a new era of innovation and growth for Grace, its employees, customers and the communities in which it operates.”

The Grace board of directors unanimously approved the transaction.

Based in Columbia, Maryland, Grace produces specialty chemicals and specialty materials in two divisions: Grace Catalysts Technologies and Grace Materials and Chemicals. Both provide innovative products, technologies and services that enhance the products and processes of Grace customers around the world. The company has approximately 4000 employees and operates in over 60 countries.

Grace will operate as a standalone company within the portfolio of Standard Industries Holdings, which includes Standard Industries’ industry leading businesses GAF, BMI Group, Schiedel, Siplast, SGI and GAF Energy, as well as related businesses 40 North (a multibillion-dollar investment platform), 40 North Ventures and Winter Properties.

40 North, a holder of 14.9 percent of shares of Grace common stock, has entered into a voting agreement with Grace, pursuant to which it has agreed, among other things, to vote its shares of Grace common stock in favour of the transaction.

“We are confident that our agreement with Standard Industries Holdings is the best path forward for Grace and our shareholders,” said Hudson La Force, president and chief executive of Grace. “Standard’s $7bn investment in Grace reflects their confidence in the significant growth opportunities we have and enables our shareholders to realise immediate value at a significant cash premium.”

Headquartered in New York, the ecosystem of Standard Industries Holdings – the parent company of Standard Industries, a privately-held global industrial company operating in over 80 countries – spans a broad array of holdings, technologies and investments, including both public and private companies from early to late stage, as well as world-class building materials assets and next-generation solar solutions.

The transaction is expected to close in the fourth quarter of 2021, subject to customary closing conditions, including approval by Grace shareholders and the receipt of certain regulatory approvals. Upon completion, Grace will become a privately held company and its common stock will no longer be listed on the New York Stock Exchange.

Serving as financial advisers to Grace are Goldman Sachs & Co. LLC and Moelis & Company LLC. Wachtell, Lipton, Rosen & Katz is serving as legal counsel. Citi and J.P. Morgan are serving as financial advisers to Standard Industries, with Sullivan & Cromwell LLP serving as legal counsel.

Mr La Force concluded: “This announcement is a testament to the strengths of our talented employees, industry-leading technologies and deep global customer relationships.”

Fraser Tennant