Dow Chemical to sell AgroFresh unit to Boulevard Acquisition for $860 mn

Dow Chemical today struck a deal to sell its AgroFresh unit to Boulevard Acquisition Corp, a public investment vehicle, formed by Avenue Capital Group, for $860 million, as part of its plan to focus on high-margin assets.

The sale comes a month after the Midland, Michigan-based company said that it would separate a portion of its chlorine business and sell it in a tax-efficient way to Olin Corp in a cash-and-stock deal valued at $5 billion. (See: Dow Chemical to sell part of chlorine business to Olin Corp for $5 bn)

Dow, which had in October last year announced its intention to divest AgroFresh, said that the unit is currently commercially operational in 45 countries worldwide.

The AgroFresh proprietary technology is aimed at the horticultural and agronomic markets. It offers a portfolio of products and services that enhance the freshness, quality and value of fresh produce.

Its flagship product is the SmartFresh Quality System, a freshness protection technology that maintains firmness, texture and appearance of fruits during storage and transport.

Upon closing, AgroFresh will become a subsidiary of Boulevard, a stand-alone public company in which Dow will retain a minority 40 per cent stake.

Dow Chemical, the largest US chemical maker by sales, had said in late 2013 that it would sell non-core assets worth $3 to $4 billion in order to create shareholders value. (Dow Chemical to divest non-core assets to raise $3 to $4 bn)

It had already divested non-core businesses worth about $12 billion in revenue since 2009 and today said that the latest sale represents yet another milestone against the company's stated target of $7 billion to $8.5 billion in proceeds from divestitures by mid-2016.

''In line with recently announced portfolio moves, this transaction demonstrates Dow's focus on selectively shifting our portfolio away from businesses that are no longer a strategic fit, allowing Dow to release cash and focus on advancing our strategic growth agenda and remunerating shareholders,'' said Howard Ungerleider, Dow's chief financial officer.

The transaction, which has been approved by the boards of directors of both companies, is expected to close in the third quarter of 2015, subject to approval by Boulevard's shareholders and other closing conditions.