The deal, worth around $19m, will add chiral chemistry and peptide intermediate synthesis units to Grace’s pharmaceutical chemistry offering and present a number of new business opportunities according to company VP Greg Poling.
Poling explained that: “Synthetech's established relationships with pharmaceutical companies and their expertise in the development-stage of patented drugs also will broaden our portfolio of products and services in our discovery sciences business."
He also suggested that acquiring Synthetech will boost Grace’s polyolefin catalysis business which supplies the plastics packaging and automotive components manufacturing industry.
"Synthetech gives us immediate production capacity for specialty single-site and polypropylene catalysts, which significantly enhances our ability to supply our large global customers with these specialized catalysts. The acquisition eliminates the need for investing in a grass-roots facility."
The addition of extra capacity follows shortly after Grace signed a long-term agreement to supply polypropylene catalysts to German industrial plastic maker Borealis.
Takeover option
For Oregon-headquartered Synthetech the deal, which is still subject to approval by shareholders and the US Bankruptcy Court, will be a considerable relief following the financial problems it has experienced in recent times.
Only last month the firm began weighing up its options after its revenue for the first quarter of fiscal 2010 fell some 56 per cent as a result of a continued decline in demand from key overseas customers.
And, although at the time CEO Gregory Hahn said expansion away from its core business was preferable to an outright sale, evidently Grace’s offer has proved to be too attractive.
In a statement issued today Dr Hahn said the deal: “Created additional value for all Synthetech stakeholders, including employees, customers, and particularly shareholders. We look forward to building a new future as part of Grace."