Chemical company Ashland said it would sell its distribution business to TPG Capital for $930 million, Reuters reported. The unit – which distributes chemicals, plastics, and other materials across North America and Europe – accounted for more than 38% of Ashland’s fourth quarter revenue. The company is selling the business unit, however, as it shifts its focus to higher-margin specialty chemicals, Reuters reported. Ashland is based in Covington, Kentucky.
(Reuters) – Ashland Inc , chemical maker and Valvoline brand owner, said it would sell its distribution business to a unit of private equity firm TPG for $930 million as its shifts focus to higher-margin specialty chemicals.
The deal comes three months after Reuters first reported Ashland was looking to sell the business.
The unit, which distributes chemicals, plastics, composite materials and environmental services in North America, and thermoplastics in Europe, accounted for more than 38 percent of Ashland’s fourth-quarter revenue of $2.38 billion.
The deal is expected to close before end-March.
Ashland has been moving away from the cyclical commodity chemicals sector and had bought specialty chemicals and water technologies company Hercules for $2.6 billion in 2008.
As of September, Ashland had cash of $417 million and long-term debt of $1.10 billion.
Shares of the Covington, Kentucky-based company, which is valued at just over $4 billion, closed at $50.94 Friday on the New York Stock Exchange. (Reporting by Adveith Nair in Bangalore; Editing by Unnikrishnan Nair)