Jefferies Says CEO-Led Buyout Offer for MacDermid (MRD) Could Start Trend

In a research note today, Jefferies & Co's Specialty Chemicals analyst Laurence Alexander said the CEO-led buyout offer for MacDermid Inc. (NYSE: MRD) could be the start of a trend in the sector. Alexander said, "the MacDermid offer suggests that smaller-cap management teams may view the contraction in sector multiples over the past 18 months as an invitation to buy undervalued assets."

Alexander also commented on consolidation in the sector, saying, among the companies they cover, Airgas (NYSE: ARG), Ashland (NYSE: ASH) and Ecolab (NYSE: ECL) will likely be the most active acquirors in 2007-2008, as they attempt to gain scale, upgrade their portfolios and improve their geographic reach. He said the most likely consolidation targets for strategic acquirors are Cytec Industries Inc. (NYSE: CYT), Hercules Incorporated (NYSE: HPC) and OMNOVA Solutions Inc. (NYSE: OMN).

Others stocks in the sector mentioned in the report were: Albemarle Corp. (NYSE: ALB), Air Products & Chemicals Inc. (NYSE: APD), Ashland Inc. (NYSE: ASH), Koppers Holdings Inc. (NYSE: KOP), Lubrizol Corp. (NYSE: LZ), Nalco Holding Co. (NYSE: NLC) and Praxair Inc. (NYSE: PX).