MOSCOW (MRC) -- PQ Group Holdings has announced an agreement to sell its sodium silicate and silica derivatives business, called performance chemicals, to a partnership established by private equity firm Cerberus Capital Management (New York, New York) and Koch Minerals and Trading for USD1.1 billion, according to Chemweek.
Proceeds from the deal will fund a special dividend of USD2.50-3.25/share that will be paid to PQ shareholders when the deal closes, which is expected later this year.
The divestiture is part of a plan by PQ to focus on the company’s catalysts and refining services businesses. Last year, as part of the plan, PQ sold its microspheres unit, called performance materials, to private equity firm The Jordan Company.
“The plans we set in motion are now coming to fruition,” says PQ Group chairman and CEO Belgacem Chiareg. “At year-end 2020, we completed the sale of the performance materials business as a first step. With this agreement to divest the performance chemicals business, we are accelerating the next and most critical step in our strategic transformation. Our core refining services and catalysts technologies businesses represent a unique opportunity to reposition PQ as a pure play, high growth company.”
The performance chemicals business is PQ’s largest reporting segment. It generated USD685.1 million in revenue and $154.3 million in adjusted EBITDA in 2019. The business operates in diversified end markets, including food and beverage, coatings, and personal care.
Meanwhile, PQ says that on 25 February it agreed to acquire Chem32, a supplier of catalyst pre-activation services, for USD44 million. The deal will complement PQ’s refining services business. Chem32’s products and services are used in traditional and renewable fuels production.
“Chem 32 diversifies our service offerings while giving us exposure to the rapidly growing renewable fuels industry,” says Kurt Bitting, president/refining services at PQ Group.
As MRC reported earlier, in December 2019, PQ Group Holdings Inc., a leading, global provider of specialty catalysts, materials, chemicals and services, announced an agreement with INEOS Polyolefin Catalysts to commercialize certain polyethylene (PE) catalysts to customers of selected processes.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased.
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