Chemours closes $521M mining business sale
WILMINGTON – The Chemours Company, a global chemistry and advanced materials company, announced Wednesday afternoon that it has closed its mining solutions division sale to a Czech chemical company for $521 million.
Chemours announced in July the deal that sold the business for 10 times its 2020 adjusted EBITDA to Draslovka Holding a.s., a Czech Republic-based private company specializing in cyanide production.
“The sale of Mining Solutions supports our focus on the sustainable growth of our three principal businesses while bolstering our balance sheet and our ability to deliver long-term shareholder value creation,” said Mark Newman, Chemours president and CEO, in a statement. “This transaction accelerates transformational strategies already underway to grow and enhance the quality of our earnings while affording increased financial flexibility. We will remain disciplined with capital allocation and are committed to a continuation of our balanced approach to building value.”
Mining solutions is a part of Chemours’ chemical solutions division and is one of the largest North American producers of solid sodium cyanide — a key component for the extraction of gold and silver from mined ores.
Chemours has operated a Memphis, Tenn., sodium cyanide plant since spinning off from DuPont in 2015. DuPont had operated the plant since the 1950s.
“We are delighted to announce the completion of this acquisition and to formally welcome our new US employees to Draslovka … Through this enlarged global platform, we will be better able to serve both new and existing customers, and we plan to invest for growth across our portfolio in support of our ongoing ambitious international expansion plans. We are excited by the prospect of using Draslovka’s market-leading cyanide-based specialty chemicals expertise and technological know-how to drive improvements in safety and efficiency, enabling us to offer our customers safe and environmentally friendly products as well as our best-in-class customer support and services,” said Pavel Brůžek, CEO of Draslovka, in a statement.
The decision to sell off its mining solutions division is the first divestiture by Chemours since its 2016 sale of its sulfur products business and cleaning and disinfectants division.
In February, then-President and CEO Mark Vergnano told analysts that customer mine shutdowns and COVID-19-related issues reduced demand for the core Mining Solutions product lines in the second and third quarters of 2020. However, volumes began to improve in the fourth quarter, with December sales the highest of the year.
With the divestiture of the Mining Solutions business, Chemours will continue to host a glycolic acid production business under that segment moving forward, company officials told analysts in November.
News of the completed sale led to a drop in Chemours’ share value of under 1% in after-hour trading Wednesday.