LONDON (dpa-AFX) - Global specialty chemicals company Elementis plc (ELM.L), on Wednesday, said it has agreed to sell its Chromium business to Yildirim Group for an enterprise value of US$170 million.
The transaction includes the transfer of environmental liabilities of $35 million and other liabilities of $8 million, with the total cash proceeds on completion expected to be around $119 million 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 2023.
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 $171 million and adjusted operating profit of $14 million. The transaction values the Chromium business at 7.3 times EBITDA (12-months to 30 June 2022).
The company further noted that the transaction will result in a gain on disposal, and a tax charge of about $12 million. The majority of the Group costs previously allocated to Chromium are expected to be phased out by the end of 2023.
Elementis will use the cash proceeds from the sale to reduce the Group's Net Debt, in line with the capital allocation priorities. Group Net Debt at 30 June 2022 was $393 million, 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.
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