Lubrizol Corporation (NYSE: LZ) shares surged nearly 28% in today’s trading on word the specialty chemical company will be acquired by billionaire Warren Buffett’s Berkshire Hathaway for $135 per share or for a total value of about $9.7 billion, including $0.7 billion in net debt. Both companies have unanimously approved the transaction. The companies expect to close the transaction during the third quarter of 2011. Upon completion of the deal, Lubrizol is expected to operate as a subsidiary of Berkshire Hathaway, providing technology, service and global supply chain support to its customers.
The company reported a rise in fourth-quarter profit, as revenues went up 11%. The net income for the fourth quarter increased to $156.7 million or $2.35 per share from $134.2 million or $1.92 per share in the previous year. The results for the quarter included restructuring and impairment charges $0.10 per share in pension settlements related to the closure of the company’s Canadian additives facility. Excluding charges, earnings were $163.8 million or $2.45 per share, up from $136 million or $1.95 per share in the prior year. The revenues for the quarter rose 11% to $1.32 billion from $1.19 billion in the same quarter last year. This increase was mainly due to a 9% improvement in combination of price and product mix and 4% higher volume.
For the full year, net income increased to $732.2 million or $10.64 per share from $500.8 million or $7.26 per share in the preceding year. Revenues grew to $5.42 billion from $4.59 billion a year ago.
The company expects earnings in the range of $11.05 to $11.55 per share. It expects an increase of 12% to 17% compared with 2010 pro forma adjusted earnings of $9.91 per share, which excludes restructuring and impairment charges and the significant tax benefits recognized in 2010.
Lubrizol Corporation stock is currently trading at $133.97. The stock is up 27.08% from its previous close. Lubrizol Corporation stock touched the high of $134.20 and lowest price in today�s session is $133.25. The company stock has traded in the range of $77.65 and $134.20 during the past 52 weeks. The company�s market cap is $8.58 billion.
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