Rockwood To Sell Performance Additives & Titanium Dioxide Businesses To Huntsman

(RTTNews) - Specialty chemicals firm Rockwood Holdings, Inc. (ROC) has agreed to sell its Titanium Dioxide Pigments and four other non-strategic businesses to Huntsman Corp. (HUN), a global specialty chemical company, for an enterprise value of $1.325 billion, including the assumption of $225 million in pension obligations. The businesses being sold include Titanium Dioxide Pigments, Color Pigments & Services, Timber Treatment Chemicals, Rubber/Thermoplastics Compounding, and Water Chemistry. These businesses had combined net sales of $1.45 billion and $1.54 billion for the year 2012 and last twelve months or LTM ended June 30, 2013, respectively.

"With the sale of these businesses, we have successfully completed, ahead of schedule, all of our key objectives for 2013," noted Seifi Ghasemi, Chairman and Chief Executive of Rockwood.

According to Huntsman Corp., this acquisition would be immediately accretive to earnings per share, and is likely to add $0.60 annual per share accretion assuming 2014 estimated results and full impact of expected cost savings.

Commenting on the transaction, Huntsman's Chief Executive said, "We anticipate TiO2 demand will continue to recover in the coming quarters, and during this time we will be focused on strengthening our world class Pigments business and capturing approximately $130 million in expected annual cost savings, to be fully achieved by the end of 2015. We plan to further unlock value through a public offering of our new combined Pigments business, which we expect to pursue within two years of completing this acquisition." He continued, "Reducing our financial leverage remains a priority and we expect to return to our debt/EBITDA target ratio of 2 to 2.5 times by 2015."

Financing commitments are in place to fund the purchase. This transaction may close in the first half of 2014, following receipt of regulatory approvals.