UPDATE 1-Cytec to sell building block business for $180 mln

Mon Jan 31, 2011 8:33am EST

* Sale to HIG Capital for $165 mln in cash, $15 mln notes

* Deal likely to reduce cont earnings by $0.15/shr

* HIG to offer employment to about 445 employees

* Cytec shares rise 2 pct

Jan 31 (Reuters) - Specialty chemicals company Cytec Industries (CYT.N) agreed to sell its building block chemicals business for $180 million in cash and notes to private investment firm HIG Capital to focus on its core businesses.

The sale of the business -- that makes raw materials used in automobiles, CD players and other home appliances -- will likely reduce Cytec continuing earnings in 2011 by 15 cents a share.

HIG Capital will offer employment to about 445 employees involved in the operations of the business, Woodland Park, New Jersey-based Cytec said in a statement. The deal involves cash consideration of $165 million.

"This transaction ... will allow us to put more attention and resources on our core growth platforms of engineered materials, in process separations and waterborne and radcure coating resins, focusing on organic growth and possible bolt-on acquisitions," Cytec Chief Executive Shane Fleming said.

Last week, the company had said removing high-volatility capital-intensive commodity businesses will reduce the impact of cyclicality in Cytec's earnings. [ID:nSGE70R0CS]

Cytec shares, which had closed at $53.87 on Friday on the New York Stock Exchange, rose 2 percent to $54.74 premarket on Monday. (Reporting by Krishna N Das in Bangalore; Editing by Don Sebastian) ((Krishna.das@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: Krishna.das.reuters.com@reuters.net))

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