Chemtura to Sell Consumer Products Business to KIK
For a cash consideration of $315 million, U.S. specialty chemicals producer Chemtura has agreed to sell its consumer products business, including manufacturing plants in the U.S. and South Africa, to Canada's KIK Custom Products. The business, with sales of $433 million in 2012, trades as Biolab in North America and Bayrol in Europe. Targeted closure is Dec. 31, 2013.
The U.S. company has also confirmed receiving an unsolicited bid for its AgroSolutions business, for which it already had announced plans to explore sale options. However, while saying a sale of AgroSolutions "at the right price" would be a "compelling opportunity," CEO Craig A. Roberson added that the current share price does not fully reflect the business's embedded value.
Chemtura said the agreed sale of the consumer business to KIK - one of North America's largest contract and private label producers of consumer, institutional and industrial products with $1.2 billion in annual sales - is aimed at delivering "substantial near-term value" to shareholders. It also will allow the company to position itself as a "pure player leader" in global development, marketing, manufacture and sale of industrial chemicals.
On realization of either or both deals, the specialty chemicals player created in the 2005 merger of the former Great Lakes and Crompton said it would return some of the proceeds to shareholders, while also continuing to make important strategic investments and pay down debt.