Overnight, LSB Industries, Inc. announced that it has entered into a definitive agreement to sell the Company’s Climate Control Business to NIBE Industrier AB (publ) of Sweden for a total cash consideration of $364 million.
The Climate Control Business generated approximately $274 million in revenue and $25 million in EBITDA in 2015.
Proceeds from the transaction will primarily be used to pay down debt. As a result, LSB will have greater financial flexibility and an improved capital structure to execute its growth strategies for its core Chemical Business, including improving the Company’s chemical plant on-stream rates.
Dan Greenwell, LSB’s President and CEO, stated, “This transaction represents an important milestone for LSB and our shareholders. Our Climate Control Business is a solid operation with innovative products in multiple categories. On behalf of the Board and management team, I would like to thank the CCB employees. Today’s announcement would not have been possible without their hard work and dedication and we commend them for their accomplishments. We are confident that in NIBE, we have found CCB the right home to realize its full potential.”
Mr. Greenwell continued, “As a focused chemicals company, our management team can now concentrate entirely on growing our Chemical Business by leveraging the substantial investments we have made over the last several years to enhance the reliability and profitability of our facilities. We are confident that the investments we made at El Dorado will significantly enhance our performance and look forward to the generation of strong cash flow from those facilities. Importantly, this transaction will enhance our financial flexibility and allow us to continue to invest in improving our plants. We look forward to realizing the benefits of a standalone LSB Chemical Business.”
The companies expect to close the transaction in the third quarter of 2016, subject to regulatory approvals and other customary closing conditions.
Source: Street Insider
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