Chemours to sell mining business for $520M
WILMINGTON – The Chemours Company, a global chemistry and advanced materials company, announced Monday afternoon that it will sell its mining solutions division to a Czech chemical company for $520 million.
Chemours, which announced in March that it was exploring the sale of the division to “refocus its business and boost share value,” will sell 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 transaction is expected to close in the fourth quarter of this year, pending regulatory approvals and other customary closing conditions.
“Today’s announcement of the Mining Solutions divestiture furthers our strategy of focusing on our three principal businesses in order to drive long-term shareholder value. Leveraging differentiated strategies, we feel confident that our businesses are well positioned to deliver growth and higher quality earnings through economic cycles,” said Mark Newman, the new president and CEO of Chemours who took over July 1, in a statement. “The entire Mining Solutions team has worked hard to create a leading business with an unmatched record of safety and supply chain stewardship. Draslovka’s longstanding expertise in cyanide coupled with a strategy devoted to growing this business, makes them an ideal partner invested in the success of our Mining Solutions employees and customers.”
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 safe, efficient, environmentally friendly and cost-effective 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.
“The acquisition marks Draslovka’s first major investment in the U.S. and advances Draslovka’s international expansion plans,” said Pavel Brůžek, CEO of Draslovka, in a statement. “Our ambition is to use Draslovka’s cyanide-based specialty chemicals expertise and technological capabilities to support our global growth plans, and drive improvements in safety, efficiency, and environmental considerations throughout the industry.”
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.
News of the sale led to a drop in Chemours’ share value of under 1% in after-hour trading Monday. The company is scheduled to release its second quarter earnings report Thursday.