Sale of Oleochemicals
Croda International PLC
08 May 2008
8 May 2008
Croda International Plc
Sale of Chicago Oleochemicals Business
Croda International Plc ('Croda') announces that it has agreed to sell its
oleochemicals business in Chicago, Illinois, USA ('Chicago Oleochemicals' or
'the business') to H.I.G. Capital, LLC ('H.I.G.') for £46.7 million. This
disposal is part of Croda's restructuring programme to re-position its
oleochemical operations following the acquisition of Uniqema in 2006.
Chicago Oleochemicals is a leading North American supplier of fatty acids and
glycerine which are used in personal care, household and industrial formulated
products. During 2007, the business made an operating profit of £4.6 million on
turnover of £87.9 million and had gross assets of £54.7 million at 31 March
2008. Going forward, the business will function as a standalone operation, led
by the current local management team.
H.I.G. is a leading private equity investment firm with more than $4.5 billion
of equity capital under management with offices throughout the USA and Europe.
H.I.G. specialises in providing capital to small and medium-sized companies in
buyout transactions.
The transaction is being effected by way of a sale of assets rather than shares
with £38.1 million payable in cash at completion and the balance as a loan note
due in 2014 but repayable earlier in certain circumstances. The agreement
contains warranties customary in a transaction of this nature and size and is
subject to a working capital adjustment at completion. All employees of the
business will transfer to the acquiring entity as a result of this transaction.
Croda will continue to source some products from the business under normal third
party commercial terms.
The completion is subject to standard closing conditions, including Hart Scott
Rodino anti-trust clearance.
The sales proceeds will initially be used to reduce the net debt of the Croda
group. The transaction is expected to be marginally earnings dilutive in the
year ending 31 December 2008 (see note 1).
Dresdner Kleinwort acted as financial adviser and Foley and Lardner LLP acted as
legal adviser to Croda on this transaction.
For further information, please contact:
Sean Christie, Group Finance Director Tel: 01405 860551
Charlie Armitstead, Financial Dynamics Tel: 020 7831 3113
Notes
1. This statement should not be taken to mean that earnings per share (before
any one-off costs) of Croda will necessarily be lower than historic earnings per
share (before any one-off costs) of Croda and no forecast is intended or
implied.
2.Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and, by their nature, are
subject to a number of risks and uncertainties that could cause actual results
and performance to differ materially from any expected future results or
performance expressed or implied by the forward-looking statement. The
information does not assume any responsibility or obligation to update publicly
or revise any of the forward-looking statements contained herein.
3. This announcement is made by Croda and is the sole responsibility of Croda.
Croda is exclusively responsible for the contents of this announcement and
neither Dresdner Kleinwort Limited nor any person acting on Croda's behalf are
responsible for or shall have any liability for any information, representation
or statement relating to Croda contained in this announcement or any information
previously published by or on behalf of Croda or otherwise.
Dresdner Kleinwort Limited, which is authorised and regulated by the Financial
Services Authority, is acting for Croda and for no-one else in connection with
the contents of this announcement and will not be responsible to anyone other
than Croda for providing the protections afforded to customers of Dresdner
Kleinwort Limited or for affording advice in relation to the contents of this
announcement or any matters referred to herein.
This information is provided by RNS
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