RNS Number : 0013I
30 November 2022
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London, 30 November, 2022 .
Sale of Chromium business
Elementis plc ("Elementis" or the "Group"), a global specialty
chemicals company, today announces that it has agreed to sell its
Chromium business to Yildirim Group for an enterprise value of
US$170m. The transaction includes the transfer of environmental
liabilities of $35m and other liabilities of $8m, with the total
cash proceeds on completion expected to be around $119m before tax,
after all transaction costs and subject to customary closing
working capital adjustments. The transaction is subject to US
regulatory approval, which is expected before the end of Q1
The sale follows the strategic review of the Chromium business
announced in April 2022. In the twelve months to 30 June 2022, the
Chromium business reported Sales of $171m and Adjusted Operating
Profit of $14m (including $7m of Group costs allocated to
Chromium). The transaction values the Chromium business at 7.3
times EBITDA (12-months to 30 June 2022). The transaction will
result in a gain on disposal, and a tax charge of approximately
$12m. The majority of the Group costs previously allocated to
Chromium are expected to be phased out by the end of 2023.
Following the sale of the Chromium business, Elementis will
continue to implement its strategy built on innovation, growth and
efficiency, with a portfolio now fully focused on premium specialty
products. In the twelve months to 30 June 2022 this portfolio
delivered underlying sales growth of 14%, adjusted operating profit
of $125m, and an adjusted operating margin of 17.0% (excluding
The cash proceeds from the sale will be used to reduce the
Group's Net Debt, in line with the capital allocation priorities.
Group Net Debt at 30 June 2022 was $393m, representing 2.4x EBITDA
(excluding the impact of IFRS16), and pro-forma Net Debt/EBITDA
(after reflecting the Chromium transaction) was 2.0x, closer to the
Group's medium-term target of 1.5x.
Paul Waterman, CEO of Elementis commented:
"Whilst Chromium has been a part of Elementis for many years,
our strategic review concluded that the interests of all
stakeholders would now be best served by a sale of the business.
Our Personal Care, Coatings and Talc businesses are focused on
developing advantaged, high-value products to drive revenue growth
and margin expansion. Going forward, I'm confident the focused
implementation of our Innovation, Growth & Efficiency strategy
positions us to deliver on our medium-term financial objectives and
generate significant shareholder value.
Chromium is an attractive business with a strong market
position, but it increasingly sat outside of this strategic
framework. We are confident that Yildirim will take the business
forward in the best long-term interests of its customers and
A virtual presentation for investors and analysts will be held
at 14.00 GMT on 30 November 2022. The presentation will be web-cast
on www.elementis.com and a copy of this announcement can also be
found on this website.
Conference call dial-in details :
UK: 020 3936 2999
USA: 1 646 664 1960
All other Locations: +44 20 3936 2999
Access Code: 939292
David Boyd, Investor Relations Tel: +44 7764 905135
Juliana Noronha, Corporate Communications Tel: +44 7384 866389
Martin Robinson, Olivia Peters Tel: 020 7353 4200
NOTES TO EDITORS:
Elementis is a global specialty chemical company, with 1,400
employees operating at 22 manufacturing sites across the globe.
Elementis works with its customers to solve their product
performance and sustainability challenges, developing and
delivering solutions that make customer's products easier to
manufacture and perform better.
Combining its leading positions in the science of materials
flow, surface modification, and formulation with its access to
unique natural materials and its global footprint, Elementis
delivers Enhanced Performance Through Applied Innovation to
customers in a wide range of markets, including cosmetics,
anti-perspirants, decorative and industrial coatings, automotive
and ceramics. In 2021 Elementis reported revenue of $880m and
adjusted operating profit of $107m.
About Yildirim Group
Yildirim Group is a leading Dutch-Turkish industrial group
headquartered in Istanbul and Amsterdam, focusing on metals and
mining, port management, fertilizers and chemicals, green energy,
shipping and logistics, construction and infrastructure, and
private equity financing. Yildirim has more than 20,000 employees
in 55 countries on 5 continents.
Yildirim Group's metals and mining business is a major producer
of chrome ore and high-carbon ferrochrome. Yildirim owns and
operates chrome mines, ferrochrome and various ferroalloy
production plants in Turkey, Sweden, Kazakhstan, Russia, Albania,
About the Chromium business
The Chromium business operates from five manufacturing sites in
the United States and employs approximately 240 people. The largest
site is at Castle Hayne in North Carolina which produces Sodium
Dichromate and Chromic Acid. These products are then transported to
the four other sites, one of which produces Chrome Oxide and the
other three Chrome Sulfate.
Elementis is the only Chromium producer in the Americas, with a
leading market share in the North Americas region, which represents
the majority of sales. Chromium products provide strength and
prevent corrosion and are used primarily in the metal plating,
timber treatment, coatings, leather tanning and other industries.
Elementis has developed a unique system of product delivery to
customers via railcar or truck, which is significantly safer than
traditional transportation methods.
Chromium production is an energy intensive business, with the
Chromium business accounting for 73% of the Group's greenhouse gas
emissions in 2021. Gross assets of the Chromium business at the end
of 2021 were $153.2 million.
Eaglescliffe site (UK)
This transaction excludes the remaining assets and liabilities
of the UK Chromium business which ceased operations in 2009. This
comprises the 480 acre Eaglescliffe site in County Durham, for
which the Group has provisions of $29m, based on analysis provided
by specialist site remediation companies. Other commercial
opportunities for the Eaglescliffe site are currently being
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(END) Dow Jones Newswires
November 30, 2022 02:00 ET (07:00 GMT)
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