Breaking News – Swiss Clariant sells Textile Chemicals

Breaking News – Clariant sells Textile Chemicals        

Today, Clariant International (CH) and according to in-house information a world leader in specialty chemicals, announces that it divests its Textile Chemicals, Paper Specialties and Emulsions business to SK Capital, New York (USA) specialties in buyouts, recapitalisations and growth equity investments in the specialty materials, chemicals and healthcare sectors

The to be sold businesses represent a value of approximately CHF 502 million, out of which around CHF 460 million in cash and equivalent to 6.3 times full year 2012 recurring EBITDA of those businesses. Both Boards of the companies have approved the deal that is subject to regulatory approvals. The transaction is expected to close by the end of the second quarter of 2013.

In 2012 the divested business will generate an estimated CHF 1.2 billion in sales or around 15 % of total Group sales and an estimated EBITDA of CHF 80 million. The three businesses employ around 3000 people in 35 countries or 14 % of the total Group workforce. The personnel will form part of the deal.

SK Capital targets fundamentally sound businesses that are, or have the potential to become, niche market leaders with sustainable competitive advantages. SK Capital typically invests equity of USD 25 million to USD 100 million in each portfolio company. For the time being the portfolio companies are Aristech Acrylics (USA), a leading manufacturer of acrylic sheeting for such applications as bath surfaces, showers, signs, counter top materials under the brand name of Avonite®.  Aristech was acquired from Mitsubishi in April 2008. Then Ascent Performance materials, a world leader in proporietary technologies that are central to the production of nylon, plastics and synthetic fibres for commercial and industrial products, including carpet, tyres and apparel, agricultural products, animal feed and personal care products. This company was acquired from Solutia in June 2009. Further Calabrian Corporation, a leading supplier of sulfor dioxide and related derivatives used in wastewater treatment and other applications. SK Capital Partners recapitalised Calabrian with the family ownership in May 2011. Then IBA Molecular, a global leader in the manufacturing and distribution of radiopharmaceutical products that are used in Positron Emission Tomography (“PET”) AND Single-Photon Emission Computed Tomography  (“SPECT”) diagnostic and therapeutic molecular imaging procedures. SK Capital Partners acquired a 60 % interest in April 2012. According to in-house information the scope of companies is currently generating strong growth and/or profitability, as well as those with complexity, significant liabilities, operational underperformance or management gaps.

Virginia’s reflections

Already early in 2012, Clariant has announced that it will look for strategic options for its Unites Textile Chemicals, Paper Specialties and the Business Line Emulsion until the end of 2013 in order to reach the set goal for profitability and other targets by 2015. Now, these businesses are sold at the end of 2012 ahead of the planned disposal.

Looking at the activities and the portfolio of SK Capital we think that the to be acquired activities might find a rewarding home for the future, but nevertheless it is not excluded that textile chemicals will be sold again when the time is ripe and that is when the general global economy is in an upturn.

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