Albemarle Said to Explore Sale of $3 Billion Treatment Unit

  • Bank of America said to be advising on Chemetall unit options
  • Divestment would help Albemarle pay down Rockwood deal debt

Albemarle Corp. is exploring the potential sale of a surface-treatment division, according to people familiar with the matter, as it looks for ways to help pay down debt from its $6 billion acquisition of Rockwood Holdings Inc.

The Chemetall unit, which provides anti-corrosion chemicals to treat car chassis prior to spray-painting, could be valued at as much as $3 billion, said one of the people, who asked not to be identified because the plan is private. Bank of America Corp. has been hired to help consider strategic options for Chemetall, said the people. Albemarle hasn’t made a final decision about whether to sell, and no formal auction is currently taking place, one of the people said.

Albemarle sold two other peripheral businesses earlier this year, though it failed to garner high enough bids for a third operation supplying fine chemicals, forcing Chief Executive Officer Luke Kissam to abandon the sale. The CEO is seeking to reduce borrowings after agreeing to acquire Rockwood in 2014 for its lithium business to take advantage of demand for the lightweight metal used in rechargeable batteries in smartphones and electric cars.

Representatives for Albemarle and Bank of America declined to comment.

Shares of Albemarle declined 0.8 percent to $75.30 as of 2:27 p.m. The stock has soared 34 percent this year, valuing the company at $8.45 billion.

Chemetall, which was also part of the Rockwood deal, reported $52.5 million in earnings before interest, taxes, depreciation and amortization in the first quarter, up 14 percent from a year earlier. Kissam said on a May 11 call that he expected further growth in the second quarter.

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