LONDON (ICIS)--Elementis has agreed to sell its surfactants business located in Delden, the Netherlands, to Swiss-headquartered chemical producer Kolb Distribution for €39m, the UK specialty chemicals firm said on Tuesday.
Elementis had previously announced its decision to divest the business as part of a strategic review as it concluded its surfactants business did not fit with its wider strategy due to a “lack of scale and material capital” requirements, it said.
The Delden facility also manufactures a limited range of products sold by Elementis’ specialty products segment.
As part of the transaction, Elementis is entering a long-term supply agreement with Kolb for continued sourcing of products.
The company said that factor will “modestly impact” the specialty products segment’s operating margin in 2018.
“This action is consistent with our reignite growth strategy. By exiting surfactants we not only generate cash, but eliminate a strategically disadvantaged business for us, simplify our supply chain and are free to reallocate material capital and internal resources to focus on higher margin growth opportunities,” said Elementis’ CEO Paul Waterman.
The proceeds of the sale, which is subject to completion of employee consultation processes as well as receipt of regulatory approvals, will be used for general corporate purposes and towards debt reduction, the company added.
Picture source: Elementis