Swiss specialty chemical giant Clariant AG has struck a deal to sell its international textile chemicals, paper specialities and emulsions businesses including its Indian operations, to global private equity firm SK Capital for around $550 million. The deal value for the Indian operations, housed under the public-listed firm Clariant Chemicals (India) Ltd, was not disclosed separately.
These businesses are part of the larger segment of dyes & specialty chemicals unit of the Indian arm that churned out revenues of Rs 577 crore in CY2011.
The transaction is expected to be closed by the end of the second quarter of 2013.
The deal involves the sale of entire R&D, applications and sales & marketing organisation, along with the production plants and sites worldwide, to SK Capital – a PE firm focused on specialty materials, chemicals and healthcare sectors.
Clariant Chemicals has production facilities for manufacturing textile chemicals and produces paper specialties and emulsion products at its Roha plant.
Clariant Chemicals’ share price rose over 2.3 per cent to Rs 637.3 a unit on the BSE in a flat Mumbai market on Thursday.
“For Clariant, the transaction marks a significant milestone in the execution of its profitable growth strategy, after the acquisition of Süd-Chemie in 2011,” said Clariant’s global CEO Hariolf Kottmann.
By the end of 2013, Clariant will be an even more profitable company than today, generating a majority of sales in noncyclical growth businesses, he added.
“We believe these businesses provide an attractive platform to capitalise on their overlaps in technology, manufacturing, supply chain and logistics,” noted Barry Siadat, managing director of SK Capital.
Clariant earlier announced that it was looking for strategic options for the business units of textile chemicals, paper specialties and the emulsions until the year-end of 2013. Also, subject to this process but in a second phase, are lined up business units of leather services and detergents & intermediates.
In 2012, the divested businesses will generate an estimated $1.3 billion in sales, around 15 per cent of total group revenues, and an estimated EBITDA of $87 million. The three businesses employ around 3,000 people in 35 countries.
(Edited by Sanghamitra Mandal)