Air Products plans to spin off its electronics and performance materials segment to shareholders via a tax-free spin-off. The materials technologies segment, which accounts for roughly 20% of Air Products revenue, had 2014 sales of $2.1 billion and adjusted Ebitda of $521 million. The targeted completion is before September 2016.
“This separation will provide shareholders ownership in two leading and focused companies while providing the opportunity to value our industrial gases and materials technologies businesses independently,” says Seifi Ghasemi, chairman and CEO of Air Products. “We believe a tax-free spinoff of the materials technologies business will create significant shareholder value.”
Guillermo Novo, current executive v.p./materials technologies, will be CEO of the yet-to-be-named company upon completion of the spin off. Ghasemi will be the non-executive chairman of the new company, while maintaining his current roles as chairman, president and CEO of Air Products.
The performance chemicals part of the business, with 2014 sales of roughly $1.2 billion, has leading positions in urethane catalysts and other additives for polyurethane foam, epoxy amine curing agents, specialty surfactants, and functional additives for industrial cleaning and mining industries.
The electronics portion, with 2014 revenue of approximately $950 million, produces, packages and stores nitrogen, specialty gases and electronic chemicals. The electronic chemicals business had leading positions in chemical mechanical planarization (CMP) slurries and gases and chemicals for thin-film deposition applications.
Ghasemi, who took over as Air Products CEO on 1 July 2014, has undertaken a significant restructuring and has said he would place the company’s focus more clearly on industrial gases. Air Products says the decision was made after an “extensive review” of strategic options for the materials technologies business. “It will allow us to take another step in pursuit of our ultimate goal, to become the safest and most profitable industrial gas company in the world,” Ghasemi says.
Air Products plans a teleconference tomorrow, Thursday 17 September at 8:00 a.m. ET, to discuss the spin-off. Ghasemi is also scheduled to present at the Credit Suisse basic materials conference in New York at 10:20 a.m. ET on 17 September.
By Robert Westervelt
Source: Chemical Week
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