GREENVILLE – Ashland Global Holdings, a public specialty materials company headquartered off Hercules Road, announced Tuesday morning that it has reached a $1.65 billion sale of its performance adhesives business to a growing French specialty ...
[caption id="attachment_214870" align="aligncenter" width="1200"] Ashland, headquartered off Hercules Road in Greenville, has sold its performance adhesives unit for $1.65 billion to a French company. | DBT PHOTO BY JACOB OWENS[/caption]
GREENVILLE – Ashland Global Holdings, a public specialty materials company headquartered off Hercules Road, announced Tuesday morning that it has reached a $1.65 billion sale of its performance adhesives business to a growing French specialty chemicals company.The all-cash sale to Arkema, based outside of Paris, values the unit at 20 times the last 12 months EBITDA value, and would reportedly net Ashland upward of $1.3 billion in the transaction. The proceeds of the sale, anticipated to close by the end of the year pending regulatory approvals, would reportedly be “invested in the growth of core businesses as well as optimize its balance sheet and reward shareholders.”Ashland first announced in May that it was exploring the sale of the unit as it looked to refocus its larger portfolio. Company leaders aim to instead grow Ashland’s integrated additive ingredients unit, particularly in pharmaceuticals, personal care and coatings.The performance adhesives segment is largely based in the United States – it employs 330 people worldwide at six plants – and is a much smaller book of business compared to specialty additives, producing $88 million in sales in the second quarter compared to the latter’s $158 million. Performance adhesives also continues to be impacted by raw-material cost escalation and constrained availability, according to recently updated investor guidance.
[caption id="attachment_197916" align="alignleft" width="270"] Guillermo Novo | PHOTO COURTESY OF ASHLAND[/caption]
“Performance Adhesives is a high-quality business with a strong and dedicated team that has demonstrated consistent and exceptional financial performance over the years,” said Guillermo Novo, Ashland chairman and CEO, in a statement announcing the sale. “I want to thank the leadership team and global employees for their dedication and commitment to Ashland and to our customers. I believe that Arkema will be a great owner of the business, creating value for customers and employees.”Ashland plans to hold an Investor Day later this year in which Novo and members of the executive team will present key business strategies and growth initiatives and outline expectations for longer-term performance. It emphasized that its portfolio moving forward would be “strongly aligned with long term environment, social and governance (ESG) drivers and with resilient high-quality consumer markets that value innovation.”“Our experience and innovation capabilities, together with a more ESG-aligned portfolio will provide exciting opportunities to create value for all of our stakeholders, especially our customers, employees and shareholders,” Novo added.Arkema is a publicly traded company that is seeking to become a major global player in the adhesives and coatings market by 2024. Last year, it reported sales of about $9.4 billion while operating in 55 countries with 20,600 employees, but the addition of Ashland’s unit strengthens its presence in the U.S.“With an excellent business which holds leading positions in many high-growth segments and a high level of profitability, this project fully aligns with the Group’s targeted acquisition strategy,” said Thierry Le Hénaff, the Arkema group’s chairman and CEO, in a statement. “The cultures of the teams are very close, focused on customer centricity and sustainable innovation. We look forward to welcoming Ashland’s high-caliber management team and to partner together for this highly value creative deal.”News of the performance adhesives unit sale caused a 3% boost to Ashland’s share price at market open Tuesday.