What happened

Investors in specialty chemicals company Lydall (NYSE:LDL) had endured a rough five years holding the stock, but that all changed Monday as the shares soared more than 80% higher. Private equity firm Clearlake Capital sees significant value in the company's assets, and is paying a significant premium to acquire Lydall.

LDL Chart

LDL vs. S&P 500 data by YCharts

So what

On Monday morning Unifrax, a Clearlake-owned maker of high-performance specialty materials, announced it has agreed to acquire Lydall for $62.10 per share in cash. The offer is a premium of more than 85% to Lydall's Friday close, valuing the company at about $1.3 billion including debt.

Lydall is focused on advanced filtration products and specialty materials that go into batteries, and Unifrax in a statement said the company believes Lydall is positioned well to capitalize on trends including clean air filtration and electric vehicle adoption.

Engineers examining equipment.

Image source: Getty Images.

"The combination of Unifrax and Lydall creates a global specialty materials platform with new cutting edge technologies in advanced filtration, electric vehicle battery systems, and energy saving applications," Unifrax CEO John Dandolph said in a statement. "The addition of Lydall's people, technologies, and assets to the Unifrax portfolio will help accelerate our innovation pipeline and creates a world class platform capable of solving the world's most pressing energy consumption, environmental and filtration challenges."

Now what

Given how long Lydall has been trading at what now looks like a discounted price without attracting any offers, it is hard to imagine a bidding war starting now. Time will tell if Unifrax is correct and Lydall is able to benefit from big trends including the electrification of the automobile. But assuming the deal goes through, investors will not have a chance to benefit from the opportunity.

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