Top Glass Maker to Buy Laguna Beach Firm

Furon Co., a Laguna Beach developer of specialty plastic products for the commercial and health-care markets, is being acquired by the world’s top glass maker in a transaction valued at $501 million, the companies said Monday.

The acquisition by Norton Co., a unit of France’s Compagnie de Saint Gobain, would create one of the world’s biggest manufacturers of high-performance plastics used in the electronics, automotive, medical and food and beverage industries.

The combined entity, minus Norton’s abrasives businesses, would have 5,500 employees and worldwide sales of about $830 million, said Dottie Wackerman, a Norton spokeswoman.

Norton would pay $472 million in cash, or $25.50 a share, for Furon, 56% more than the Friday closing price. Norton, which is based in Worcester, Mass., would also pay $29 million for outstanding stock options and assume $116 million in Furon debt.

Furon’s stock surged 54%, or $8.81 a share, to $25.13 on Monday, making it the 12th-biggest percentage gainer in U.S. markets. More than 1.2 million shares changed hands on the New York Stock Exchange, compared with average daily volume of 48,800 shares over the last three months.

The company’s board unanimously approved the deal, which is expected to close at the end of October.

“Furon and Norton complement each other in a variety of things ranging from products to customers to geographic presence,” Wackerman said.

No major layoffs are expected at Furon, which has 3,370 employees, said Michael Hagan, Furon’s chief executive. However, Hagan said he will step down as an executive after the deal closes. He said he will serve as a consultant to Norton for at least a year to help in the integration of the two companies.

Officials at both companies declined to discuss whether Furon would keep its name or be swallowed up by Norton.

Analysts applauded the deal.

Norton’s purchase of Furon will allow it to lower raw material and other costs through economies of scale and to offer customers more products, said Christopher Bodnar of Bear Stearns in New York. “It’s a win-win proposition for both companies,” he said.

The marriage also will expand Norton’s reach into the U.S. market, said Joel Tiss, an analyst at Lehman Bros. in New York.

Furon is the leading U.S. manufacturer of high-performance plastics, whereas Norton is particularly strong in Asia and Europe.

“By putting the two companies together, there’s even more potential than either one had alone,” Tiss said.