Ferro Sells Solar Pastes Assets to Heraeus
Ferro Corp. recently announced it has sold assets related to its solar pastes business to Heraeus, a privately owned global precious metals and technology company based in Hanau, Germany. As announced on October 9, 2012, Ferro had reportedly decided to explore strategic options for the solar pastes business in an effort to eliminate the negative impact from the business on earnings and cash flow. The market for conductive pastes used in the manufacture of solar cells has declined substantially since 2011 as the solar power panel industry has struggled with overcapacity and falling prices. As a result of the transaction, the company will eliminate operating losses associated with the solar business.
“The solar pastes transaction will advance our efforts to drive shareholder value,” said Peter T. Thomas, interim president and CEO of Ferro. “It will eliminate approximately $17 million of negative drag on operating earnings from the solar pastes business, allowing higher returns on invested capital and freeing up capital for investment in our core businesses. It also will eliminate a source of volatility in our business, allowing management to drive more consistent and predictable earnings. In addition, this transaction enables the company to reduce debt by approximately $11 million and precious metal consignment arrangements by approximately $12 million.”