27 Dec 2012

Clariant sells its paper chemicals business after years of strategic drift and wandering.

Following earlier announcements that Clariant will off-load its unprofitable businesses, it has now been announced that agreement has been reached with US PE firm, SK Capital, to sell its paper business (and textiles, emulsions).  The sale amounts to about CHF 502 million, of which approximately CHF 460 million will be cash.  This is said to be equivalent to 6.3 times the estimated full year 2012 recurring EBITDA.  It is now a matter of waiting for regulatory approval.

This ends Clariant's years of strategic drift and wandering in businesses which had increasingly moved from being specialities based in high-cost countries, to more commodity-based businesses where quality competition from China and India had started to dominate.

It will be interesting to see what SK Capital do with these businesses ....... there are certainly many opportunities for improvements in costs, operation and strategy.  Further divestment of businesses and IP could also bring reward to SKC.

Clariant's announcement --> click here

No comments:

Post a Comment