Air is free and for the most part so is water, but apparently, the cost to acquire a company that helps purify both doesn't come cheap. Japanese company Kuraray proved as much with an an agreement to acquire Calgon Carbon (CCC 21.40, +8.17, +61.8%) for approximately $1.1 billion, or $21.50 per share, in cash, or roughly $1.3 billion including debt.
The takeout price translates to a 63% premium over CCC's closing price on Wednesday, which is why it is no surprise to hear Calgon Carbon CEO Randy Dearth acknowledge the deal with Kuraray delivers "...premium value to our stockholders."
They needed it, too.
Prior to the acquisition offer, shares of CCC were down 22.4% for the year and down approximately 43% from the high they hit in 2015.
Calgon Carbon, which is headquartered in Pittsburgh, is a leading manufacturer of activated carbon that specializes in providing products and services that protect human health and the environment from harmful contaminants in water and air. In 2016 it reported $514.2 million in sales.
Kuraray sees Calgon Carbon as a good fit that will enable it to expand its carbon materials business. Calgon Carbon will be run as a separate subsidiary of Kuraray and will continue to have its world headquarters in Pittsburgh.
The deal is targeted to close by the end of December 2017, pending the necessary approvals.
Shares of CCC have responded in kind to the offer price and are up 62% in pre-market action.