December 17, 2010 / 12:12 PM / 7 years ago

UPDATE 1-Rockwood to sell AlphaGary business for $300 mln

* Cash deal with Mexico’s Mexichem

* Deal close likely in during Q1 next year

* Says sale will enhance adjusted EBITDA margins

Dec 17 (Reuters) - Specialty chemicals company Rockwood Holdings Inc ROC.N agreed to sell its AlphaGary plastic compounding business to Mexico’s Mexichem (MEXCHEM.MX) for $300 million in cash to reduce debt.

Princeton, New Jersy-based Rockwood expects the deal to close during the first quarter of next year.

The company has long-term debt in excess of $2 billion.

“This sale will further enhance our overall adjusted EBITDA margins, improve leverage ratio and help maximize shareholder value,” Rockwood Chief Executive Seifi Ghasemi said in a statement.

    AlphaGary, the largest division in Rockwood’s specialty compounds segment, manufactures specialty plastic compounds for the wire and cable business.

    The specialty compounds business contributed over 7 percent to its turnover last year.

    Share of the company, which have gained 32 percent in value in the last three months, closed at $40.06 on Thursday on the New York Stock Exchange. (Reporting by Krishna N. Das in Bangalore; Editing by Prem Udayabhanu)

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