Clariant AG agreed to sell three businesses to SK Capital Partners for 502 million Swiss francs ($550 million) as the chemical maker divests assets a year before its own deadline to concentrate on more profitable units.
The price is 6.3 times estimated 2012 earnings before interest, taxes, amortization and depreciation, Muttenz, Switzerland-based Clariant said in a statement. The deal, part of a plan to sell five divisions by the end of 2013, is expected to be completed by late June, the company said. The stock rose to the highest in almost nine months.
“What is important is that they could sell all three as a unit, and pretty early too,” Martin Schreiber, an analyst at Zuercher Kantonalbank, said by phone. “This is clearly a positive signal for the other business units to be sold.”
The early disposals give a year-end boost to Clariant Chief Executive Officer Hariolf Kottmann as he presses ahead with plans to divest the two remaining businesses that are slated for sale next year. Kottmann is seeking to revamp Clariant after acquiring German catalyst maker Sued-Chemie AG last year for $2.7 billion.
“I am of course very happy that we were able to realize the sale much faster than most people had expected,” Kottmann said in an e-mailed response to questions. Proceeds from the sale could be used for acquisitions as the CEO continues to “re-position” Clariant’s assets, he said.
A plan to exit leather chemicals and sell a unit making detergents and intermediates is “well on track,” Kottmann said. He declined to comment further on the process, which the Swiss chemical maker said Nov. 14 would begin with an auction in the first quarter of 2013.
Clariant said it will receive about 460 million francs in cash for selling the textile chemicals, paper-specialties and emulsions businesses. Pension liabilities make up a 42 million-franc non-cash part of the deal, spokesman Kai Rolker said by phone.
“The writedown on the asset is much less than I expected,” said Zuercher Kantonalbank’s Schreiber. “They seem to have sold it for something like book value.”
Clariant was trading up 3.1 percent at 12.21 francs as of 3:40 p.m. in Zurich, the highest since April 5, based on closing prices, after rising as much as 6 percent earlier today. The stock has gained 36 percent this year as Kottmann has sold weaker assets.
The three units, which employ about 3,000 people in 35 countries, will report full-year revenue of about 1.2 billion francs, Clariant said.
The Ebitda margin of the three businesses for 2012 is about 7.8 percent of revenue, based on Clariant’s forecasts. That’s lower than the 11 percent margin analysts are estimating for the entire company, according to data compiled by Bloomberg. Clariant aims for an Ebitda margin exceeding 17 percent in 2015.
Citigroup Inc., Homburger AG and Ernst & Young advised Clariant on the sale, while Morgan, Lewis & Bockius LLP, Baer & Karrer AG and Jefferies & Company, Inc. advised SK Capital.