Cytec Exits Criterion Catalyst

West Paterson, NJ-based Cytec Industries has reached a definitive agreement to sell its 50% interest in Criterion Catalyst LP (Houston) to joint venture partner CRI International Inc. (CRI), a Royal/Dutch Shell Group plc company. The total value of the transaction is approximately $100 million, including $60 million in cash, 50% of Criterion's debt, and other future considerations.

Criterion was formed in 1988 by combining the international catalyst businesses of American Cyanamid Co. (which later spun off Cytec), Shell Oil Co., and Shell International Chemical Co.

The world's largest supplier of hydroprocessing catalysts, Criterion employs more than 600 people worldwide. It is a major supplier of hydrotreating, reforming, and specialty catalysts for the refining industry, as well as dehydrogenation catalysts for styrene monomer. More recent innovations include its Century high-activity hydrocracking catalysts; SynSat process for low-sulfur, high-cetane diesel fuel; and naphtha reforming and Zeolyst hydrocracking catalysts to increase refinery fuel output.

Criterion pioneered delivery of total catalyst and related services packages to key customers. These "cradle-to-grave" packages may include regeneration, loading, unloading, presulfiding, and spent catalyst reclamation.

The company owns and operates plants in Azusa and Pittsburg, CA, and Michigan City, IN. It participates in two joint venture plants, one in Singapore and the other in Baton Rouge, LA. It also draws on manufacturing and support facilities dedicated to Criterion in plants owned by or affiliated with its parent companies. These facilities are in Ghent, Belgium; Medicine Hat, AB; and Willow Island, WV.

Major laboratories are located in Stamford, CT; Houston; and Amsterdam, The Netherlands.

"This action further streamlines Cytec and increases our focus on the growth of our platform businesses," says Cytec chairman/president/CEO David Lilley. He plans to pump the cash from the deal back into platform business expansion, strategic acquisitions, and stock plan repurchases.

"The Company believes, in all material respects, that the total proceeds of this transaction will allow it to recover the carrying value of its investment in Criterion and related loans," says executive VP/CFO James P. Cronin.

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By Alan S. Brown