The transaction values the Masterbatches business at USD 1,560 million, representing c. 12.2 times the last twelve months reported EBITDA ending September 2019 on a cash and debt free basis.
This amount is payable at closing, which is expected by Q3 2020.
As previously communicated, the proceeds from the intended divestments of Clariant’s non-core businesses will be used to invest in innovations and technological applications within the core Business Areas, to strengthen Clariant’s balance sheet and to return capital to shareholders.
As a consequence of the divestment of the Masterbatches business, as well as the anticipated divestment of the Pigments business by the end of 2020, Clariant’s Board of Directors is proposing an extraordinary cash distribution of CHF 3.00 per share to the Clariant Annual General Meeting to be held on March 30, 2020.
Subject to a positive vote of Clariant’s shareholders, the extraordinary distribution of approx.
CHF 1 billion will be paid out post the closing of the divestment of the Masterbatches business.
The deal with PolyOne comprises two separate transactions.
The global Masterbatches business is sold in a deal valued at USD 1,500 million, representing c. 12.1 times the last twelve months reported EBITDA ending September 2019.
Separately, the sale of Clariant’s Masterbatches business in India has been approved by Clariant Chemicals (India) Limited’s Board of Directors and is valued at INR 4,260 million or approx. USD 60 million, representing c. 17.3 times the last twelve months reported EBITDA ending September 2019.
Clariant Chemicals (India) Limited is listed on the stock exchanges in India with Clariant AG holding a 51% controlling stake.
The closing of both transactions is subject to customary closing conditions and regulatory approvals.
Clariant’s Masterbatches business offers color and additive concentrates and performance solutions for plastics.
Clariant’s Masterbatches help to enhance the market appeal or end-use performance of plastic products, packaging or fibers.
In the financial year 2018, the total Masterbatches business generated sales of around CHF 1.181 billion. ■