Croda International (CRDA) to sell PTIC businesses for €915m
By Rob Griffin
13:26, 22 December 2021
British chemical company Croda International has agreed to sell most of its Performance Technologies and Industrial Chemicals (PTIC) businesses to Cargill Inc for €915m ($1.03bn).
The announcement follows a comprehensive strategic review of PTIC, announced in May 2021, to determine what ownership structure would help ensure its future success.
It’s hoped the transaction, which is subject to regulatory approval, will be completed in Summer 2022, with both companies working together on separating the two businesses.
Croda’s stock price was down 1.5% to £98.34 by 13:00 GMT in London.
Chief executive Steve Foots said the deal with Cargill Velocity Holdings Limited, a wholly-owned subsidiary of Cargill Inc, would complete Croda’s transition into a pure-play consumer and life sciences company.
“We will focus our capital and resources on delivering sustainable solutions and scaling our consumer, health and crop care technologies, leading to consistent sales growth and an even stronger profit margin,” he said.
Colleen May, president of Cargill’s Bioindustrial business said: “Combining our diverse, global supply chain and deep operational expertise with Croda's extensive industrial business capabilities and broad bio-based portfolio will spark a new wave of innovation and create tremendous value for our customers.”
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According to Croda’s statement, the divested business, which represented 77% of PTIC's 2020 revenue, is comprised of five manufacturing facilities.
These include the Gouda plant in the Netherlands, the Hull plant in the UK, and Croda Sipo in China – a joint venture in which Croda owns 65%, as well as additional laboratory facilities.
Meanwhile, the retained parts of PTIC will provide integral support to Croda’s Consumer Care and Life Sciences sectors.
Croda intends to reinvest proceeds from the transaction into fast-growth areas, as well as increasing its exposure to health care and “developing its position” as a sustainability leader in consumer care.
“The group’s priority is to use capital released through the transaction for organic capital expenditure and take advantage of the significant growth opportunities available in these markets,” it stated.
The company added that this would be supplemented by potential acquisitions of disruptive technologies in existing and adjacent markets.
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