US Ashland acquires International Specialty Products for $3.2bn

31 May 2011 12:09  [Source: ICIS news]

A buy buttonLONDON (ICIS)--US-based Ashland has agreed to acquire privately-owned specialty chemical manufacturer International Specialty Products (ISP) for $3.2bn (€2.24bn) in an all-cash transaction, the two companies said on Tuesday.

The acquisition, which is expected to close before the end of the September quarter and is still subject to approval, will expand Ashland's position in high-growth markets such as personal care, pharmaceutical and energy, the companies added in a joint press statement.

ISP will also strengthen Ashland's functional ingredients business, as well as provide complementary additives for the group's food and beverage, energy, coatings, adhesives and water treatment markets, the companies said.

"This defining transaction enables us to significantly expand our market positions in higher margin, higher growth and less cyclical global markets like personal care and pharmaceuticals,” said Ashland chairman and CEO James O'Brien.

“It broadens Ashland's presence within attractive growth areas like skin, hair and oral care, which are large and fast-growing segments of the $5bn-plus personal care specialty ingredients market. In addition, we expect to more than double the size of our highest-margin functional ingredients business," O'Brien added.

On a pro-forma basis giving effect to the transaction, Ashland would have had combined revenue for the 12 months ended 31 March 31 2011 of around $7.6bn, with nearly half of revenues generated outside North America, the companies said.

The new functional ingredients business is expected to contribute roughly half of Ashland's $1.1bn pro-forma earnings before interest, taxes, depreciation and amortisation (EBITDA), the group statement added.

Ashland expects to realise annualised run-rate cost savings of approximately $50m by the second year following the transaction's close through eliminating redundancies and capturing operational efficiencies,” the companies said.

For the 12 months ended 31 March 2011, ISP generated sales of approximately $1.6bn and EBITDA of around $360m.

($1 = €0.70)

For more on Ashland visit ICIS company intelligence


By: Franco Capaldo
+44 (0)20 8652 3214

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