Ashland to sell water technologies unit to Clayton, Dubilier & Rice for $1.8 bn
19 Feb 2014
US chemical manufacturer Ashland Inc yesterday said it would sell its water technologies unit to private equity firm Clayton, Dubilier & Rice, for $1.8 billion.
"This divestiture allows us to focus on our core specialty chemicals business and to accelerate return of capital to shareholders," said James O'Brien, CEO of Ashland.
Kentucky-based Ashland, a Fortune 500 company, said it would use net proceeds of $1.4 billion from the sale to fund a $1.35 billion share buyback programme.
With annual sales of $1.7 billion and approximately 3,000 employees worldwide, Ashland's Water Technologies is a leading supplier of specialty chemicals and services to the pulp and paper and industrial water markets.
"Thanks to the hard work and commitment of the entire team, Water Technologies has shown tremendous improvement over the past year, and I believe it is well positioned to build on that momentum under Clayton, Dubilier & Rice ownership," said O'Brien.
''We believe this transaction, when combined with our ongoing global restructuring, will help position Ashland for EBITDA margins that rank among the top 25 per cent of specialty chemical companies," he added.
Founded in 1978, Clayton, Dubilier & Rice is a private investment firm which has invested more than $19 billion in 59 businesses with an aggregate transaction value of more than $90 billion.
"We are excited to be partnering with the AWT management team and look forward to working with them to move the business forward to its next level of profitable growth," said Clayton, Dubilier & Rice partner David Wasserman.