MOSCOW (MRC) -- Dow Chemical Co. has kicked off processes to sell two of its specialty chemicals subsidiaries that could fetch close to USD2 billion combined, according to people familiar with the matter, part of its effort to divest several billion dollars worth of non-core assets by 2015, said Chicagotribune.
Dow has hired investment bankers including Morgan Stanley to sell its Angus Chemical Co. subsidiary in Buffalo Grove, Ill., as well as AgroFresh Inc., the people said on Wednesday, asking not to be named because the matter is not public.
Those two units are in addition to the epoxy business and some chlorine and derivatives assets that Dow previously said it has earmarked for sale. The move to put additional assets on the block underscore Dow's stated effort to divest less lucrative businesses and return more money to shareholders in the face of increasing investor pressure. Midland, Michigan-based Dow makes everything from insecticides to plastics.
Dow's Angus Chemical Co. is a wholly owned subsidiary that makes additives used in a variety of products including paints, personal care and cosmetics and life science utilities. That business has earnings before interest, taxes depreciation and amortization (EBITDA) of around USD115 million and could be sold for more than 10 times that amount, some of the people said.
Philadelphia-based AgroFresh, another wholly owned Dow subsidiary up for sale, makes products used to enhance the freshness, quality and value of fresh produce. Its flagship product is the SmartFresh Quality System, a freshness protection technology proven to maintain firmness, texture and appearance of fruits during storage and transport, according to its website.
This unit has USD50 million to USD60 million of annual EBITDA and would also likely be sold for more than 10 times that number, the people said. Those businesses, both in the early stage of sale processes, are expected to attract interest from other chemical companies as well as private equity firms, according to the people familiar with the matter.
As MRC informed previously, Dow Chemical, the largest US chemical maker by sales, said in December 2013 it would separate its chlorine-related assets including its epoxy business as the company focuses on higher-margin activities. The chlorine assets account for as much as USD5 billion of annual revenue and include plants at 11 sites employing almost 2,000 people.
The Dow Chemical Company is an American multinational chemical corporation. As of 2007, it is the second-largest chemical manufacturer in the world by revenue (after BASF) and as of February 2009, the third-largest chemical company in the world by market capitalization (after BASF and DuPont). Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
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