Ashland signs definitive agreement to sell performance adhesives business to Arkema for $1.65 billion
August 31 2021 - 3:00AM
Ashland Global Holdings Inc. (NYSE: ASH) announced today that its
wholly owned subsidiary, Ashland LLC, has signed a definitive
agreement to sell its performance adhesives business to Arkema in
an all-cash transaction valued at approximately $1.65 billion or 20
times LTM EBITDA1. The transaction is expected to close by the end
of calendar year 2021, subject to receipt of regulatory approvals
and satisfaction of other customary closing conditions.
Ashland's performance adhesives business has a
portfolio of products that are well positioned in the market and
valuable technologies with differentiating performance for
customers across a variety of applications and markets.
“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, chairman and chief executive officer, Ashland.
“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 expects net proceeds from the sale to
total approximately $1.2 to $1.3 billion and the company will
maintain strong capital allocation discipline using the proceeds to
invest in the growth of core businesses as well as optimize its
balance sheet and reward shareholders.
The company 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 Ashland's longer-term performance.
The transaction is driven by Ashland’s strategy
to focus its resources on expanding its additive and ingredients
portfolio which will be strongly aligned with long term
environment, social and governance (ESG) drivers and with resilient
high-quality consumer markets that value innovation.
“As we look to the future, we are excited about
the quality of our additive and ingredients portfolio and our
leadership position in the core markets we serve,” said Novo. “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. As we execute our strategy to expand
Ashland’s additive and ingredients leadership position, we will
maintain capital allocation discipline and focus on our goals of
driving profitable growth, margin expansion and improved free cash
flow conversion."
Citi is acting as financial advisor to Ashland.
Cravath, Swaine & Moore LLP and Squire Patton Boggs LLP are
acting as legal advisors to Ashland.
Forward-Looking Statements
This news release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Securities Exchange Act of 1934, as amended.
Ashland has identified some of these forward-looking statements
with words such as “anticipates,” “believes,” “expects,”
“estimates,” “is likely,” “predicts,” “projects,” “forecasts,”
“objectives,” “may,” “will,” should,” “plans” and “intends” and the
negative of these words or other comparable terminology. In
addition, Ashland may from time to time make forward-looking
statements in its annual report to shareholders, quarterly reports
and other filings with the Securities and Exchange Commission
(SEC), news releases and other written and oral communications.
These forward-looking statements are based on Ashland’s
expectations and assumptions, as of the date such statements are
made, regarding Ashland’s future operating performance, financial
condition and expected effects of the COVID-19 pandemic on
Ashland’s business, operating cash flow and liquidity, as well as
the economy and other future events or circumstances. These
statements include, but may not be limited to, statements about the
sale of the performance adhesive business, including the expected
timing for closing of the sale, and the use of proceeds therefrom
and Ashland’s strategy and objectives for its remaining portfolio.
Various risks and uncertainties may cause actual results to differ
materially from those stated, projected or implied by any
forward-looking statements, including any delay in the receipt of
regulatory approvals for the sale of the performance adhesives
business. The extent and duration of the COVID-19 pandemic on our
business and operations is uncertain. Factors that will influence
the impact on our business and operations include, without
limitation, risks and uncertainties affecting Ashland that are
described in its most recent Form 10-K (including Item 1A Risk
Factors) filed with the SEC, which is available on Ashland’s
website at http://investor.ashland.com or on the SEC’s website at
http://www.sec.gov. Ashland believes its expectations and
assumptions are reasonable, but there can be no assurance that the
expectations reflected herein will be achieved. Unless legally
required, Ashland undertakes no obligation to update any
forward-looking statements made in this news release whether
because of new information, future events or otherwise. Information
on Ashland’s website is not incorporated into or a part of this
news release.
About Ashland
Ashland Global Holdings Inc. (NYSE: ASH) is a premier specialty
materials company with a conscious and proactive mindset for
sustainability. The company serves customers in a wide range of
consumer and industrial markets, including adhesives, architectural
coatings, automotive, construction, energy, food and beverage,
nutraceuticals, personal care and pharmaceutical. Approximately
4,200 passionate, tenacious solvers – from renowned scientists and
research chemists to talented engineers and plant operators –
thrive on developing practical, innovative and elegant solutions to
complex problems for customers in more than 100 countries. Visit
www.ashland.com and www.ashland.com/sustainability to learn
more.
1 Based on EBITDA of $82 million for the
performance adhesives business for the 12 months ended June
30, 2021. EBITDA represents operating income plus depreciation
and amortization. EBITDA is a non-GAAP financial measure. See
Ashland’s periodic reports on Form 10-K and 10-Q for
reconciliations for the relevant periods.
™ Trademark, Ashland or its subsidiaries,
registered in various countries.
FOR FURTHER INFORMATION:
Investor
Relations:
Media Relations:Seth A.
Mrozek
Carolmarie C. Brown+1 (302)
594-5010
+1 (302)
995-3158samrozek@ashland.com
ccbrown@ashland.com
- Ashland signs definitive agreement to sell Adhesives business
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