Chemtura Corporation (NYSE:CHMT) (Euronext:CHMT) (“Chemtura” or the “Company”) today announced that it has entered into a stock purchase agreement to sell its Consumer Products business, including dedicated manufacturing plants in the U.S. and South Africa, to KIK Custom Products Inc. (“KIK”) for $315 million in cash at closing subject to certain customary pre- and post-closing adjustments, including for working capital and assumed pension liabilities. The Company also announced today that its board of directors has decided to explore a sale of the Company’s agrochemicals business, Chemtura AgroSolutions.
The agreement to sell the Consumer Products business, combined with the decision to explore a sale of Chemtura AgroSolutions, is aimed at delivering substantial near-term value to shareholders while further focusing the Company on opportunities to create additional value as a pure-play leader in the global development, marketing, manufacture and sale of industrial specialty chemicals.
The Company expects to use a substantial portion of the proceeds from the sale of Consumer Products and potential sale of the agrochemicals business to return capital to shareholders. The Company will also use proceeds to continue to make important investments to strengthen and enable the continuing growth of the remaining businesses, as well as pay down debt in order to return towards its long-term stated total leverage target of approximately 2X Adjusted EBITDA.
"Today’s announcements represent the next step in our plan to simplify and transform our portfolio, positioning us to better benefit from secular industry growth trends in our chosen areas of market focus and create a sustainable competitive advantage,” said Craig A. Rogerson, Chairman, President and CEO of Chemtura. “Following the sales of our Consumer Products and Antioxidants businesses, a sale of Chemtura AgroSolutions would transform Chemtura into a more focused, pure-play industrial specialty chemicals company with leading global positions that we believe can capitalize on attractive end-market growth trends, and continue delivering superior value to our shareholders and opportunities for our employees for many years to come.”