Ashland to pay $3.2bn for ISP
Kentucky, US-based Ashland, which makes chemicals for the construction, automotive and water treatment sectors, will pay $3.2bn (€2.2bn) for New Jersey-headquartered ISP in an agreement expected to close in September.
Ashland CEO James O’Brien described the move as a “defining transaction” that will allow the firm to “significantly expand our market positions in higher margin, higher growth and less cyclical global markets.”
He told Reuters that: “We looked at several companies in the past couple of years, and the one that kind of rose to the top was ISP."
"What we like about ISP is that they have very strong technology and patent protection. It was the fit that we wanted."
O'Brien added that: "A big part of what we're buying is the research capability. We will do our best not to disrupt the talent of the corporation so we can retain as many people as possible."
The main driver for the deal seems to be ISP’s nutrition and personal care units which, according to a report on the New York Times’ DealBook site, generate three quarters of the privately-owned firm’s operating income each year.
ISP’s pharmaceutical business, which contributes the remainder of its $1.6bn annual revenue, is based on the provision of third-party synthesis services as well as solubilisation, coating, disintregrant and binding technologies.
Ashland has not yet unveiled its integration plans for ISP, but said that it expects to realise cost savings of $50m a year by “through eliminating redundancies and capturing operational efficiencies.”
News of the proposed acquisition comes just three years after Ashland bought specialty additive, ingredient and chemicals supplier Hercules, expanding its position in the water treatment and paper industries.
Ashland did not respond to in-Pharmatechnologist.com’s request for additional information.
