November 19 2014, David R Brown
Orica sells off its chemical distribution and manufacturing business to funds advised by Blackstone
Orica Limited (Orica, ASX:ORI) has announced that it has entered into an agreement to sell its Chemicals business to funds advised by Blackstone for A$750 million. The sale includes the Chemicals trading businesses in Australia, New Zealand and Latin America (Chile, Peru, Colombia, Argentina and Brazil) and the Australian Chloralkali manufacturing business. It also includes Bronson & Jacobs which is a specialty distributor to the food & nutrition and health & personal care industries in Australia, New Zealand and Asia (China, Indonesia, Thailand, Malaysia, Singapore).
Orica is a world class company and we are excited about investing in its market leading chemicals business
James Carnegie
Head of Private Equity for Australia
In August this year Orica advised the market that it had completed a strategic review of its Chemicals business and that it would be pursuing a separation of the business, either by sale or demerger. Following a number of third parties expressing interest in acquiring the Chemicals division, the Orica Board formed the view that a sale would likely result in higher and more certain value for shareholders than a demerger.
Orica Managing Director and Chief Executive Officer, Mr Ian Smith, said “The certainty as to value and outcome of this transaction is a good result for Orica shareholders.”
Blackstone Senior Managing Director and Head of Private Equity for Australia, James Carnegie, said “Orica is a world class company and we are excited about investing in its market leading chemicals business.”
Orica Chemicals should also benefit from the freedom to develop its own corporate strategy, capital structure and financial policies appropriate for the business as a separately entity. A name for the new company has yet to be announced.
As part of the transaction, Orica will retain responsibility for legacy environmental remediation obligations of the Chemicals business. The transaction, which is subject to Australian Foreign Investment Review Board and New Zealand Overseas Investment Office approval is expected to close in the first quarter of calendar 2015.
About Orica
Orica (ASX: ORI) is a multinational corporation that provides commercial blasting systems, mining and tunneling support systems, and various chemical products. For the full financial year ending in September 2013 the Orica Group achieved revenues of A$6,898.1Bn (US$6.4Bn or €4.8Bn) and had around 14,500 employees worldwide. Orica's two main business units are Mining Services and Chemicals. Orica's chemical business has history in chemical manufacturing and distribution which dates back to the 1920s.
About Blackstone
Blackstone is one of the world's leading investment firms. The company's has over $300 billion in assets under management, including investment vehicles focused on private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds, all on a global basis.
Source(s): Orica ASX announcement
Further Information
Visit: http://www.orica.com