Ashland Inc. ASH has landed a deal to jettison the car-care products assets of its renowned brand Valvoline to Niteo Products, LLC, a newly formed affiliate of private investment firm – Highlander Partners, L.P. Financial terms of the agreement were not divulged.
The assets to be acquired by Niteo will include manufacturing and distribution facilities in Hernando, MS. Roughly 140 people work in car-care products, including around 120 based at the manufacturing and distribution facilities in Mississippi. The transaction, which is subject to certain closing conditions, is expected to close within 90 days.
Car-care products, which accounted for less than 4% of Valvoline’s 2014 revenues of $2 billion includes brands such as Car Brite, Eagle One and Pyroil. The divestment also includes Valvoline-branded and private-label maintenance chemicals sold into the Do-It-Yourself (DIY) channel.
Ashland plans to reinvest the proceeds from this assets sale in generating faster, profitable growth within its core lubricants business such as the expansion of its Valvoline Instant Oil Change store base. The company remains committed to invest in higher-return opportunities within Valvoline’s core business.
Ashland offers specialty chemicals in more than 100 countries. With the closure of its Water Technologies unit sale last year, Ashland now has three commercial units – Specialty Ingredients, Performance Materials and Valvoline.
Ashland currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the specialty chemicals space include KMG Chemicals Inc. KMG, OM Group Inc. OMG and Chemtura Corporation CHMT. While both KMG Chemicals and OM Group sport a Zacks Rank #1 (Strong Buy), Chemtura carries a Zacks Rank #2 (Buy).
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