Clariant AG, which agreed to sell three businesses to SK Capital for about $540 million last year, said it’s likely to sell a leather unit and its detergent and intermediates business separately.
“We are looking at very diverse activities, so I don’t think it would make sense for anyone to try to put them together,” Chief Financial Officer Patrick Jany said in an interview in Zurich yesterday.
Clariant is benefiting from a benign marketplace with available financing helping it to support buyers’ interest in the units, Jany said. The Swiss company may get about 300 million francs ($310 million) from the sales, according to Martin Schreiber, an analyst at Zuercher Kantonalbank.
“It’s a good environment to be a seller,” Jany said. “Everything is on green: it remains to be seen what is the most value-creating deal.”
The proceeds of disposals will reduce debt and give Clariant a BBB credit rating by about the end of the year, Jany said, adding that the company doesn’t expect to make a huge profit from the disposals. Its current rating is BBB- at Standard & Poor’s and Ba1 at Moody’s.
Shares of Clariant traded 2 percent higher at 13.88 francs as of 11:40 a.m. local time. They have advanced 15 percent this year, giving the company a market value of 4.6 billion francs.
Chief Executive Officer Hariolf Kottmann said he plans to remain in his post for the next five years as he sees through the transformation of Clariant, spunoff from Sandoz in 1995.
The former executive of Celanese Corp. and SGL Carbon AG is in the final throes of an overhaul before the focus is switched to developing about 250 research projects in more profitable areas such as agrochemicals and ingredients for shampoos. The project pipeline has the potential to generate 1 billion francs in new sales by 2017, the company has said.
Though Clariant has been mooted as a possible takeover target, Kottmann said it’s unlikely to be sold to a larger chemical company such as BASF SE or Dow Chemical Co.
“Based on how I read the market currently, BASF is focusing internally, doing their homework when it comes to performance chemicals,” said the chief executive, who has a PhD in organic chemistry. “I don’t think Clariant is their preferred candidate.”
Upon reaching a targeted 17 percent earnings before interest, taxes, depreciation and amortization margin by 2015, Kottmann favors ramping up organic growth over further margin improvements, he said in an interview yesterday.