Lubrizol officials said Noveon brings leading positions in several high-growth specialty chemical markets and that it will give Lubrizol economies of scale in markets that it entered through its previous acquisitions.

Noveon really brings critical mass in those growth markets where we have been growing and seeking to grow in a more comprehensive way, said President James L. Hambrick, who is scheduled to be named chief executive officer when current CEO and Chairman W.G. Bares steps down from that post April 26.

Lubrizol, based in Wickliffe, Ohio, had completed acquisitions of nine companies and product lines since stating near the end of 2000 that it intended to double the size of its business. The company recorded $1.78 billion in revenue that year. All of those pickups were outside its traditional focus – additives for automotive and other lubricants – and none had annual revenues of more than $50 million.

In December officials alluded to the slow pace of growth and vowed to make larger acquisitions. Noveon, which is based in the Cleveland suburb of Brecksville, Ohio, certainly fills that bill. The company manufactures a wide range of chemicals, from chlorinated polyvinylchloride resins to food preservatives to emulsions for paints and coatings. It has 27 manufacturing sites, more than 2,800 employees and had revenue of $1.2 billion during the past year. Like Lubrizol, Noveon has been acquisition-minded, with 10 small bolt-ons in the past three years.

The transaction is subject to regulatory approval, but officials said they expect it to be approved and completed in three months. At that time, Noveon will become a subsidiary that includes Lubrizols existing Fluid Technologies for Industry segment. The segment makes surfactants, defoamers and other additives mostly for applications such as coatings, inks and personal care products, but also for lubricant sectors such as metalworking fluids.

After the acquisition, Lubrizol will have annual revenues of $3.2 billion, half coming from its existing Fluid Technologies for Transportation segment, which supplies additives for transportation lubes. Lubrizol is the worlds largest supplier of motor oil additive packages, and officials said the company remains committed to that business, which they described as a steady source of income.

FTT is a very, very strong cash flow generator, Bares said. It has a market leadership position, so we believe it is very important for us to continue to service those customers well because it is a profitable business for us.

But he and others also indicated that they see other markets as offering better opportunities for growth. The acquisition of Noveon will allow us to carry out our vision of enhancing our overall corporate growth rate, Bares said.

Lubrizol will pay Noveons current owners $920 million in cash and will assume approximately $920 million in debt.

Noveon was formed in February 2001 when BFGoodrich spun off its Performance Materials Division to AEA Investors, DLJ Merchant Banking Partners, a division of CSFB Private Equity and MidOcean Capital. That transaction saddled the new company with nearly $1.1 billion in debt. The companys own press releases referred to its debt level as substantial and a potential problem, although a spokesman maintained Friday that it had not become a burden.

Prior to concluding negotiations with Lubrizol, Noveon had announced that it planned to conduct an initial public stock offering. The company said it had been prepared to begin a roadshow this week to try to gather interest in the offering.