Ohio-based Ferro Corp. (NYSE: FOE ) is getting out of the pharmaceuticals business.
The company, whose forte has always been the manufacturing of specialty chemicals, announced Monday that it has sold its Pfanstiehl Laboratories pharmaceuticals subsidiary to an affiliate of private equity firm Med Opportunity Partners, LLC.
Med Opportunity will pay $16.9 million cash up front, and Ferro will have the opportunity to receive a potential earn-out of up to $8 million more over the next two years if Pfanstiehl hits certain earnings targets. (The subsidiary earned $2.4 million last year). Ferro also gets to keep the rights to claim certain tax benefits that might otherwise have moved with Pfanstiehl to Med Opportunity -- worth an estimated $5 million.
Ferro is in the process of unloading "non-core" assets. It sold off its solar pastes assets earlier this year, yet another step in a plan to reduce costs by $50 million annually, and focus on its most profitable ventures.