Ashland Looks to Sell Chemicals Biz

NEW YORK (Reuters) – Ashland Inc (ASH.N), the chemical maker and Valvoline brand owner, is looking to sell its chemicals and plastics distribution business and has hired Bank of America (BAC.N) to advise on the possible sale, according to several sources familiar with the matter.

The business has brought in around $73 million in adjusted earnings before interest, tax, depreciation and amortization over the 12 months before June 30. One source said the unit could sell for about seven times EBITDA, or more than $500 million at current EBITDA levels.

The unit distributes chemicals, plastics, composite materials and environmental services in North America, and thermoplastics in Europe.

 

Ashland has been shifting its strategy towards higher margin specialty chemicals and away from the cyclical commodity chemicals sector of the industry.

It bought specialty chemicals and water technologies company Hercules for $2.6 billion in 2008.

An Ashland spokesman said the company does not comment on market speculation.

Bank of America declined to comment.

Shares of Ashland closed down 17 cents at $49.36. (Additional reporting by Matt Daily; editing by Carol Bishopric, Bernard Orr)