Standard Industries Buying W. R. Grace (GRA) In $7 Billion Deal

By Amit Chowdhry ● April 26, 2021
  • W. R. Grace & Co. (NYSE: GRA) and Standard Industries Holdings announced that they have entered into a definitive agreement under which Standard Industries Holdings will acquire Grace in an all-cash transaction valued at approximately $7 billion

Leading global specialty chemical company W. R. Grace & Co. (NYSE: GRA) and Standard Industries Holdings, the parent company of Standard Industries, a privately held global industrial company, announced that they have entered into a definitive agreement under which Standard Industries Holdings will acquire Grace in an all-cash transaction valued at approximately $7 billion, including Grace’s pending pharma fine chemistry acquisition. And Standard Industries’ related investment platform 40 North Management LLC is a long-standing shareholder of Grace.

Under the terms of the deal, Standard Industries Holdings will buy all of the outstanding shares of Grace common stock for $70 per share in cash. And the purchase price represents a premium of approximately 59% over Grace’s closing stock price of $44.05 on November 6, 2020, the last trading day prior to the announcement of 40 North’s initial proposal to acquire the company on November 9, 2020. Grace’s Board of Directors unanimously approved the transaction.

The closing of the deal is subject to customary closing conditions, including approval by Grace shareholders and the receipt of certain regulatory approvals. And the deal is not contingent upon the receipt of financing. Financing commitments have been provided by J.P. Morgan, BNP Paribas, Citi, and Deutsche Bank, and investment funds affiliated with Apollo Global Management as capital partner.

40 North – a holder of 14.9% 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 favor of the transaction.

Consistent with the terms of the merger, the company will suspend payment of a dividend going forward. And in light of this announcement, Grace will issue its first quarter 2021 earnings results on May 6, 2021.

The parties expect the deal to close in the fourth quarter of 2021. And upon completion of the transaction, Grace will become a privately held company and Grace’s common stock will no longer be listed on the New York Stock Exchange.

Grace is going to 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.

KEY QUOTES:

“We are thrilled to welcome Grace to the Standard Industries family and 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.”

— David Millstone and David Winter, Co-CEOs of Standard Industries Holdings

“We are confident that our agreement with Standard Industries Holdings is the best path forward for Grace and our shareholders. Standard’s $7 billion investment in Grace reflects their confidence in the significant growth opportunities we have and enables our shareholders to realize immediate value at a significant cash premium. This announcement is a testament to the strengths of our talented employees, industry-leading technologies, and deep global customer relationships.”

— Hudson La Force, Grace’s President and Chief Executive Officer

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