ICL to sell two businesses for approximately $1 billion
December 7, 2017
ICL, a leading global specialty minerals and specialty chemicals company, announced that it has agreed to sell its fire safety and oil additives (P2S5 or phosphorus pentasulfide) business units (the “Business”) to SK Capital, a private investment firm focused on specialty materials, chemicals and pharmaceuticals sectors, for an aggregate amount of approximately $1 billion.
The business is part of ICL Specialty Solutions’ Advanced Additives business line and has operations in North and South America, Europe, Australia and Asia.
The sale is expected to close in the first half of 2018, subject to the fulfillment of customary closing conditions specified in the sale agreement, including receipt of approvals by the competent authorities.
ICL’s major research and development capabilities in specialty chemicals as well as its ability to identify business opportunities, have transformed the Company into a global leader in several core and non-core businesses. The Business became part of ICL in 2005 and was transformed into a global leader through organic growth and complementary acquisitions. ICL’s fire safety business unit is a leading supplier of chemicals and services for fighting wild fires, and class A&B foams to extinguish fires. ICL’s oil additives business unit products are used in the manufacture of lubrication oil additives, mining chemicals and pesticides. During 2016, the Business contributed approximately $245 million to ICL’s sales and approximately $79 million to ICL’s operating income. During the twelve months ended September 30, 2017, and mainly as a result of an unusually high wild fire season in North America, the Business contributed approximately $294 million to ICL’s sales and approximately $112 million to ICL’s operating income.
While the Business has become a global leader, with advanced technologies and state-of-the-art service operations, it has low synergies with ICL’s core mineral chains. The decision to divest the Business is in line with ICL’s previously announced strategy to divest low synergy businesses to focus the Company’s operations on its mineral chains, reduce debt and generate funds for growth initiatives. As part of this strategy, ICL is also currently working to complete the previously announced sale of its 50% stake in IDE Technologies, a desalination and water treatment company.
ICL’s Executive Chairman, Mr. Johanan Locker, stated, “This sale constitutes another step towards fulfilling the targets of focusing ICL’s businesses and selling low synergy assets. The divestment will reduce debt leverage, and provide flexibility for the development of innovation and growth in ICL’s specialty products and in precision agriculture”.
Mr. Asher Grinbaum, ICL’s Acting CEO, added, “The sale is yet another important milestone, as part of our efforts to streamline our business and solidify our capital structure. During the past year, we continued to grow our specialty businesses while carefully managing our capital allocation. These measures were reflected in our financial results, which have demonstrated how ICL benefits from its unique business model. We are confident the fire safety and the oil additives businesses will continue to grow and prosper under SK Capital, and we wish the management team and our long-time employees much success in the future.”
BofA Merrill Lynch acted as exclusive financial advisor to ICL and Latham & Watkins LLP acted as legal counsel to ICL