Oct. 10 (Bloomberg) -- Chemtura Corp. sold its consumer-products units to KIK Custom Products Inc. for $315 million and may also sell its agricultural-chemicals unit to focus on industrial chemicals such as flame retardants.
Toronto-based KIK gains plants in the U.S. and South Africa, Philadelphia-based Chemtura said today in a statement. The unit being sold makes pool and spa chemicals such as chlorine, the company said on its website.
KIK, controlled by New York-based private equity firm CI Capital Partners, said in a separate statement the transaction will be financed through debt underwritten by Credit Suisse Group AG and UBS AG. The acquisition “enhances our household-cleaning portfolio and furthers our ongoing commitment to pool care,” Kik said in its statement.
Chairman and Chief Executive Officer Craig A. Rogerson sold Chemtura’s antioxidants unit for $200 million in May in the first step of focusing the company on businesses with leading industry positions. Chemtura has received “unsolicited expressions of interest” in acquiring the Chemical AgroSolutions unit and has hired Morgan Stanley to act as financial adviser on the divestiture.
“A sale of Chemtura AgroSolutions would transform Chemtura into a more focused, pure-play industrial specialty chemicals company with leading global positions that we believe can capitalize on attractive end-market growth trends,” Rogerson said in the statement.
Proceeds from the consumer products sale and the potential divestiture of the AgroSolutions unit will be used to compensate shareholders, invest in remaining units and pay down debt, Chemtura said.
The company also said its third-quarter earnings will be “substantially lower than current consensus,” partly because of the unit sale and “weakness” in the unit that makes flame retardants. The company was projected to earn 32 cents a share, the average of six analysts’ estimates compiled by Bloomberg.
Chemtura emerged from Chapter 11 bankruptcy in 2010 after filing for protection in March 2009, citing falling demand for resins, electronics and construction materials made with the chemicals it manufactures.
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