Solvay to Sell US Eco Services business to CCMP Capital
Solvay said it has signed a binding agreement to sell its US-based Eco Services sulfuric acid virgin production and regeneration business to affiliates of CCMP Capital Advisors, a private equity investor.
Completion of the transaction is expected in the fourth quarter of this year.
The company is changing hands for $890 million (€660 million), which according to Solvay represents just over eight times adjusted EBITDA for the 12 months ending June 30.
CEO Jean-Pierre Clamadieu said the divestment of Eco Services "is another step in Solvay's transformation aimed at achieving higher growth and greater returns. Eco Services has a market leading position and generates stable cash flows, but its business profile differs from Solvay's strategic ambitions," he added.
CCMP Capital, which the Solvay chief said is committed to working with the management team to make the investments necessary to support the long term growth of Eco Services, specializes in middle market buyouts and growth equity investments of $100-500 million in North America and Europe.
With offices in New York, Houston and London, the private equity group invests in four primary industries: Consumer/Retail, Industrial, Energy and Healthcare.
Solvay said in February it was exploring strategic options for Eco Services.
Reporting financial results for the second quarter of 2014, the Belgian chemical producer said its recurring operating profit (REBITDA) improved by 10% to €485 million, thanks to good volume growth and "sustained strong delivery on excellence measures." Sales increased by 2% year-on-year to €2.6 billion.
For the full year, Clamadieu confirmed earlier guidance, forecasting "high single-digit year-on-year REBITDA growth at prevailing exchange rates." He said some figures for 2013 and 2014 may be restated to reflect the Eco Service divestment.