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(Alliance News) - Elementis PLC on Wednesday said that it has agreed upon the sale of its Chromium business, following on from a strategic review in April 2022.
Elementis is a FTSE-250 listed, London-based specialty chemical company.
The firm has agreed to sell Chromium to Yildirim Group, a Dutch-Turkish industrial group headquartered in Istanbul and Amsterdam, for an enterprise value of USD170 million.
The transaction includes the transfer of environmental liabilities of USD35 million, and other liabilities of USD8 million, with the total cash proceeds on completion expected to be around USD119 million before tax and transaction costs.
In the twelve months ended June 30, Chromium reported sales of USD171 million, and adjusted operating profit of USD14 million. Elementis said that the sale would result in a gain on disposal, and a tax charge of USD12 million.
The cash proceeds from the sale will be used to reduce the group's net debt.
The transaction is expected to close before the end of the first quarter of the new year. Most group costs previously allocated to Chromium are expected to be phased out by the end of 2023.
Elementis said that, following the sale, it would continue to implement its own independent growth strategy. In the previous financial year, the portfolio delivered underlying sales growth of 14%.
"Whilst Chromium has been a part of Elementis for many years, our strategic review concluded that the interests of all stakeholders would now be best served by a sale of the business. Our Personal Care, Coatings and Talc businesses are focused on developing advantaged, high-value products to drive revenue growth and margin expansion. Going forward, I'm confident the focused implementation of our Innovation, Growth & Efficiency strategy positions us to deliver on our medium-term financial objectives and generate significant shareholder value," said Chief Executive Officer Paul Waterman.
Elementis shares were trading 3.7% higher at 112.80 pence each in London on Wednesday morning.
By Holly Beveridge; hollybeveridge@alliancenews.com
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