Sale of German Oleochemicals business
Croda International Plc (“Croda”) announces that it has agreed to sell its Emmerich Site and associated business in Germany to KLK Emmerich GmbH, a subsidiary of the KLK Group (Kuala Lumpur Kepong Berhad), for €60.5 million. As part of the transaction the purchaser will assume IAS19 retirement benefit obligations relating to the business of approximately €35.2 million such that cash payable at completion will be €25.3 million. The disposal largely completes Croda’s restructuring programme to re-position its oleochemical operations following the acquisition of Uniqema in 2006.
The Emmerich Site produces fatty acids and glycerine, most of which were sold into Croda’s Industrial Specialities market. Croda acquired the Emmerich site as part of the Uniqema acquisition. On a pro-forma basis the business had sales of £80.0m and made an operating loss of £2.1million in 2009, with net operating assets of £37.7 million at 31 December 2009.
Completion is subject to German anti-trust clearance and Malaysian Central Bank approval. The agreement contains warranties customary in a transaction of this nature and size and is subject to adjustments for actual working capital employed and retirement benefit obligations at completion. Croda will continue to supply and source some products to and from the business under normal third party commercial terms.
The sales proceeds will initially be used to reduce Croda’s net debt which stood at £292.7 million at 31 March 2010. The transaction is expected to be marginally earnings enhancing in the year ending 31 December 2010 (see note).
Croda Quarter Results Excluding Emmerich (pdf, 30kb)
This statement should not be taken to mean that earnings per share (before any one-off costs or amortisation of intangibles) of Croda will necessarily be higher than historic earnings per share (before any one-off costs or amortisation of intangibles) of Croda and no forecast is intended or implied.