Ashland to explore strategic alternatives for Composites and for BDO manufacturing facility in Marl, Germany
March 20 2018 - 8:00AM
-
Review aimed at
creating more focused specialty chemicals company and enhancing
shareholder value
-
Ashland expects to use
net proceeds from potential sale primarily to repay debt and
repurchase shares; Board of directors approves new $1 billion share
repurchase authorization
-
Company intends to
take actions to eliminate stranded costs from potential sale of
these assets
COVINGTON, KENTUCKY, March 20,
2018 - Ashland Global Holdings Inc. today announced the next step
on its path toward creating the premier specialty chemicals
company, with a more streamlined portfolio focused on specialty
ingredients and improved margins that should generate enhanced
value for shareholders.
Ashland announced it will explore
strategic alternatives for its Composites segment, as well as for
the butanediol (BDO) manufacturing facility in Marl, Germany, and
related merchant Intermediates and Solvents (I&S) products.
Ashland intends to evaluate all options with respect to these
assets, including a potential sale. The company plans to retain its
BDO plant in Lima, Ohio, to ensure consistent supply for Ashland's
internal needs.
The company expects to use
proceeds from a possible sale of these assets primarily for debt
reduction and share repurchases. Ashland's board of directors has
approved a new $1 billion share repurchase authorization to provide
flexibility. The new authorization replaces the previous
authorization which had approximately $500 million remaining.
Ashland intends to take action to eliminate stranded costs from a
potential sale, consistent with similar past transactions.
"The decision to explore strategic
options for these assets is consistent with Ashland's vision of
creating the premier specialty chemicals company," said Bill
Wulfsohn, Ashland chairman and chief executive officer. "Given the
strong performance of these businesses, as well as recent tax
reform changes, we believe it is the right time to initiate this
review. With a more streamlined and focused product portfolio,
improved margins and reduced earnings volatility, Ashland will be
better positioned to deliver sustained earnings growth and unlock
significant value for shareholders. Over the past year, we have
taken specific actions to sustain and grow Ashland's premium mix
while also improving our competitiveness, particularly within
Specialty Ingredients. We have made important progress in a number
of areas, and momentum is building. Our outlook for the year has
not changed."
Wulfsohn said he expects the
combination of good financing availability, low interest rates, a
healthy macroeconomic environment and tax reform tailwinds to
create a supportive backdrop for a potential sale of these
assets.
If Ashland decides to sell these
assets, it would expect to sign an agreement by the end of calendar
2018. Ashland has retained Citi to assist in this strategic review
process.
About Ashland
Ashland Global Holdings Inc. (NYSE: ASH) is a premier global
specialty chemicals company serving customers in a wide range of
consumer and industrial markets, including adhesives, architectural
coatings, automotive, construction, energy, food and beverage,
personal care and pharmaceutical. At Ashland, we are approximately
6,500 passionate, tenacious solvers - from renowned scientists and
research chemists to talented engineers and plant operators - who
thrive on developing practical, innovative and elegant solutions to
complex problems for customers in more than 100 countries.
Visit ashland.com to learn more.
C-ASH
Forward-Looking
Statements
This news release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. Ashland has identified
some of these forward-looking statements with words such as
"anticipates," "believes," "expects," "estimates," "is likely,"
"predicts," "projects," "forecasts," "objectives," "may," "will,"
"should," "plans" and "intends" and the negative of these words or
other comparable terminology. Ashland may from time to time make
forward-looking statements in its annual reports, quarterly reports
and other filings with the SEC, news releases and other written and
oral communications. These forward-looking statements are based on
Ashland's expectations and assumptions, as of the date such
statements are made, regarding Ashland's future operating
performance and financial condition, as well as the economy and
other future events or circumstances. Ashland's expectations and
assumptions include, without limitation, internal forecasts and
analyses of current and future market conditions and trends,
management plans and strategies, operating efficiencies and
economic conditions (such as prices, supply and demand, cost of raw
materials, and the ability to recover raw-material cost increases
through price increases), and risks and uncertainties associated
with the following: the potential strategic alternatives for its
Composites segment and for the butanediol (BDO) manufacturing
facility in Marl, Germany, and related merchant Intermediates and
Solvents (I&S) products (including, in each case, the
possibility that a transaction may not occur or that, if a
transaction does occur, Ashland may not realize the anticipated
benefits from such transaction), the impact of acquisitions and/or
divestitures Ashland has made or may make, including the
acquisition of Pharmachem (including the possibility that Ashland
may not realize the anticipated benefits from such transactions);
Ashland's substantial indebtedness (including the possibility that
such indebtedness and related restrictive covenants may adversely
affect Ashland's future cash flows, results of operations,
financial condition and its ability to repay debt); Ashland's
ability to generate sufficient cash to finance its stock repurchase
plans; the potential that Ashland does not realize all of the
expected benefits of the separation of its Valvoline business; the
potential that the Tax Cuts and Jobs Act enacted on December 22,
2017, will have a negative impact on Ashland's financial results;
and severe weather, natural disasters, cyber events and legal
proceedings and claims (including product recalls, environmental
and asbestos matters). Various risks and uncertainties may cause
actual results to differ materially from those stated, projected or
implied by any forward-looking statements, including, without
limitation, risks and uncertainties affecting Ashland that are
described in Ashland's most recent Form 10-K (including Item 1A
Risk Factors) filed with the SEC, which is available on Ashland's
website at http://investor.ashland.com or on the SEC's website at
http://www.sec.gov. Ashland believes its expectations and
assumptions are reasonable, but there can be no assurance that the
expectations reflected herein will be achieved. Unless legally
required, Ashland undertakes no obligation to update any
forward-looking statements made in this news release whether as a
result of new information, future events or otherwise.
(TM) Trademark, Ashland or its
subsidiaries, registered in various countries.
FOR FURTHER
INFORMATION:
Media Relations:
Gary Rhodes
+1 (859) 815-3047
glrhodes@ashland.com
Investor Relations:
Seth A.
Mrozek
+1 (859) 815-3527
samrozek@ashland.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Ashland Inc. via Globenewswire
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