Innospec Commits to Acquire European Personal Care and Home Care Business From Huntsman
August 03 2016 - 5:15AM
Significant expansion to Innospec’s
Personal Care business with complementary
products
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.”
Use of Non-GAAP Financial
Measures
The information presented in this press release
includes financial measures that are not calculated or presented in
accordance with Generally Accepted Accounting Principles in the
United States (GAAP). These non-GAAP financial measures
comprise EBITDA, income before income taxes excluding special items
and net income excluding special items and related per share
amounts. EBITDA is net income per our consolidated financial
statements adjusted for the exclusion of charges for interest
expense, net, income taxes, depreciation, amortization and
acquisition fair value adjustments. Income before income
taxes, net income and diluted EPS, excluding special items, per our
consolidated financial statements are adjusted for the exclusion of
foreign currency exchange (gains)/losses, amortization of acquired
intangible assets, adjustment to fair value of contingent
consideration, acquisition-related costs and adjustment of income
tax provisions. Reconciliations of these non-GAAP financial
measures to their most directly comparable GAAP financial measures
are provided herein and in the schedules below. The Company
believes that such non-GAAP financial measures provide useful
information to investors and may assist them in evaluating the
Company’s underlying performance and identifying operating
trends. In addition, management uses these non-GAAP financial
measures internally to allocate resources and evaluate the
performance of the Company’s operations. While the Company
believes that such measures are useful in evaluating the Company’s
performance, investors should not consider them to be a substitute
for financial measures prepared in accordance with GAAP. In
addition, these non-GAAP financial measures may differ from
similarly-titled non-GAAP financial measures used by other
companies and do not provide a comparable view of the Company’s
performance relative to other companies in similar
industries. Management believes the most directly comparable
GAAP financial measure is GAAP net income and has provided a
reconciliation of EBITDA and net income excluding special items,
and related per share amounts, to GAAP net income herein and in the
schedules below.
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.
Forward-Looking Statements
This press release contains certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements
other than statements of historical facts included or incorporated
herein may constitute forward-looking statements. Such
forward-looking statements include statements (covered by words
like “expects,” “estimates,” “anticipates,” “may,” “believes,”
“feels” or similar words or expressions), for example, which relate
to earnings, growth potential, operating performance, events or
developments that we expect or anticipate will or may occur in the
future. Although forward-looking statements are believed by
management to be reasonable when made, they are subject to certain
risks, uncertainties and assumptions, and our actual performance or
results may differ materially from these forward-looking
statements. Additional information regarding risks,
uncertainties and assumptions relating to Innospec and affecting
our business operations and prospects are described in Innospec’s
Annual Report on Form 10-K for the year ended December 31, 2015,
and other reports filed with the U.S. Securities and Exchange
Commission. You are urged to review our discussion of risks
and uncertainties that could cause actual results to differ from
forward-looking statements under the heading "Risk Factors” in such
reports. Innospec undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
Contacts:
Brian Watt
Innospec Inc.
+44-151-355-3611
Brian.Watt@innospecinc.com
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