ROC
Rockwood Holdings Inc.
Industrial/Transportation, Event Driven/Special Sit
08/04/2014
Presented
| Date | 08/01/2014 |
| Price | $79.52 |
| Market Cap | $5.67B |
| Ent Value | $5.65B |
| P/E Ratio | N/A |
| Book Value | N/A |
| Div Yield | 0% |
| Shares O/S | 71.24M |
| Ave Daily Vol | 1,390,000 |
| Short Int | 1.60% |
Current
| Price | $3.45 |
| Market Cap | $0.12B |
| Rockwood Holdings, Inc. develops, manufactures, and markets various specialty chemicals for industrial and commercial applications primarily in Germany, the United States, and Europe. The company operates in two segments, Lithium and Surface Treatment. The Lithium segment offers basic lithium compounds comprising lithium carbonate, which is used as a fluxing agent for enamels, glass, and ceramic production; lithium hydroxide for the use in high performance greases; lithium nitrate for the rubber industry; lithium chloride, which is principally used in gas and air treatment; and potash, a by-product of lithium brine. It also offers special salts that include lithium phosphate, which is used as a catalyst for chemical reactions; lithium bromide that is used for air conditioning applications; and lithium carbonate for pharmaceutical applications, as well as butyllithium/lithium metal products that is used as a polymerization initiator for synthetic rubber and thermoplastic elastomers. In addition, this segment provides battery products for electronic applications in disposable and rechargeable batter industries; lithium compounds and other products for life science applications, such as special reagents for the synthesis of drug intermediates, and for the flavor and fragrances industry; and special metal compounds for X-ray diagnostic systems and airbag applications in chemical, pharmaceutical, metallurgical, automotive, electronics, and pyrotechnical industries. The Surface Treatment segment offers various metal surface treatment products; cleaners, iron phosphates, coolants, paint strippers, and flocculants; corrosion protection products that comprise waxes, which are used to protect airframes; maintenance chemicals for aircraft engines and turbines; and sealants for airplanes. This segment serves automotive, aerospace, and general, as well as steel and metal-working industries. Rockwood Holdings, Inc. was incorporated in 2000 and is based in Princeton, New Jersey. |
Publicly traded companies mentioned herein: Albemarle Corporation (ALB), BASF SE (BAS GR), EI du Pont de Nemours & Co (DD), PPG Industries (PPG), Rockwood Holdings Inc (ROC), Valspar Corp (VAL)
Highlights
The presenter is long shares of specialty chemicals/ materials manufacturer Rockwood Holdings (ROC), and believes that there is a good chance the bid from Albemarle gets topped. Since mid-July when the $6.2 billion deal was announced, a number of events have transpired, including the departure of ROC’s former leader Seifi Ghasemi (who built and more recently pared down the company) and Albemarle’s stock dropping more than 10%. Given the value of ROC’s lithium assets and the potential for demand growth for the scarce asset to accelerate, he thinks the risk/ reward is attractive regardless of whether or not the deal goes through in its current form.
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