What: Specialty chemicals maker Platform Specialty Products Corp (NYSE:ESI) investors are finally having a good day, with shares trading up almost 13% on Wednesday following news that a new CEO had been hired.
So what: Before today's big gain, Platform's shares were down by about half this year, with the majority of that decline happening since October. The company has been working through the acquisition of U.K.-based chemical company Alent, and there were a lot of questions whether Platform's business model, which is heavily predicated on acquiring products (versus developing them) was working out. The announcement near the end of October that the current CEO, Daniel Leever, would retire once a new CEO was hired, also contributed to the stock's decline.
Now what: The leadership question has now been answered, and Mr. Market is certainly pleased with the hiring of Rakesh Sachdev as the new CEO. However, the questions about Platform's business model remain unanswered, and Sachdev will have his hands full leading the integration of Alent into Platform. That's before factoring in the macroeconomic and cyclical challenges that several of Platform's business segments are dealing with.
The good news is that Sachdev comes with extensive experience in the executive suite, having most recently been the CEO of Sigma-Aldrich until it was acquired for $17 billion by Merck. He will also have the assistance of Platform founder and chairman Martin Franklin, who has said he would take a more active role with the company going forward, following the October announcement that Leever would retire.