OREANDA-NEWS. Innospec Inc. (NASDAQ:IOSP) today announced that it commits to acquiring the European Personal Care and Home Care business of Huntsman Corp.

The business is based in Belgium, and has manufacturing assets in France, Italy and Spain. With sales revenues of around $230 million, the business employs approximately 430 people.

On a proforma basis the business has a full year outlook to generate $24m of EBITDA (earnings before interest, tax, depreciation and amortization). The purchase price is expected to be $200m with an Enterprise Value of $225m as Huntsman will retain related accounts receivable and trade payables.  Innospec will fund the purchase through existing cash and additional debt.

Patrick S. Williams, President and CEO of Innospec Inc., said, “We have signalled for some time that we have been seeking an appropriate acquisition in the Personal Care sector. Our preferred profile was always to add to our technology platforms, and grow our geographical presence. Our target is to significantly expand the range of products we can offer to our customers in both Personal Care and Home Care.”

Bruce McDonald, President of Performance Chemicals at Innospec, added, “The Huntsman business has a well-established presence in Europe and the range of technologies is very complementary to the existing Innospec range. Together, we will now be competing in a much larger part of the sector. With substantial assets in Europe from which to manufacture our existing and future products, the acquisition will form a springboard to continue Innospec’s successful development of innovative technologies.”

Peter R. Huntsman, President and CEO of Huntsman Corporation, commented: “This proposed transaction is consistent with our strategic financial objectives of increasing our cash flow generation, growing our downstream differentiated businesses and separating our titanium dioxide business.  We plan to use the proceeds from this sale to repay our debt and strengthen our balance sheet.  The decoupling of our European surfactants business would allow us to concentrate our focus and grow businesses within our portfolio with greater long term strategic fit.  Additional reshaping of Huntsman will occur soon, as we are actively working towards a spin-off of our titanium dioxide, additives and textile effects businesses.”

The acquisition process is subject to a period of consultation with the employee representative bodies and clearance from the regulatory authorities. The transaction is expected to close early in the fourth quarter.

Patrick S. Williams added, “This helps us to deliver on our objective to build a larger Performance Chemicals segment which creates the balanced portfolio of businesses we have outlined in our strategic plan.”

 

About Innospec Inc.

Innospec Inc. is an international specialty chemicals company with approximately 1300 employees in 20 countries. Innospec manufactures and supplies a wide range of specialty chemicals to markets in the Americas, Europe, the Middle East, Africa and Asia-Pacific.  The Fuel Specialties business specializes in manufacturing and supplying fuel additives that improve fuel efficiency, boost engine performance and reduce harmful emissions. Oilfield Services provides specialty chemicals to all elements of the oil & gas exploration and production industry.  The Performance Chemicals business creates innovative technology-based solutions for our customers in the Personal Care market, focusing on skincare, haircare and suncare.  Octane Additives produces octane improvers to enhance gasoline.