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Specialty chemicals and advanced materials company Rockwood Holdings, Inc. (ROC - Snapshot Report) has closed the earlier announced divestiture of its advanced ceramics business "CeramTec" to private equity firm Cinven for €1.49 billion (roughly $2 billion). The company received net cash proceeds of $1.75 billion from the sale. 
Germany-based CeramTec makes high performance advanced ceramics materials and products for medical, electronics, industrial and automotive markets with 18 facilities globally. The entity has strong foothold in a number of niche markets such as medical products, cutting tools and mechanical applications.
The divestiture is in line with Rockwood’s goal to become a more focused specialty chemical company. The company plans to use the net proceeds from the sale to pare debt, return capital to shareholders and re-invest in core businesses.  
Rockwood, in Aug 2013, released its second-quarter 2013 results. Its profit, as reported, skid 86% year over year to $32.3 million or 41 cents per share in the quarter, hurt by charges associated with sale of non-core assets, especially advanced ceramics and clay-based additives, and lower earnings from the Titanium Dioxide (TiO2) Pigments division. Adjusted earnings of 73 cents per share missed the Zacks Consensus Estimate by 3 cents.
Net sales rose 7.8% year over year to $822.3 million in the reported quarter. Consolidated sales (including discontinued operations) rose 7.4% to $972.3 million. By that measure, it beat the Zacks Consensus Estimate of $948 million.
Revenues from the Advanced Ceramics segment, which has been classified as discontinued operation, went up 5% to $150 million on higher volumes of medical ceramics.
Rockwood expects continued growth and strong margins in its lithium and surface treatment businesses in the back half of 2013. It also sees its TiO2 pigments business to achieve a turnaround in the second half.
Rockwood remains focused on optimizing free cash flows and implementing appropriate capital allocation strategies through dividends and share repurchases and reinvestment in key businesses in 2013.
Rockwood currently holds a Zacks Rank #5 (Strong Sell).
Other companies in the specialty chemical space with favorabe Zacks Rank are Ferro Corp. (FOE - Snapshot Report), Minerals Technologies Inc. (MTX - Snapshot Report) and Sensient Technologies Corp. (SXT - Snapshot Report). While Ferro retains a Zacks Rank #1 (Strong Buy), Minerals Technologies and Sensient Technologies retain a Zacks Rank #2 (Buy).

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