Ashland Inc. ASH has wrapped up the sale of 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, which was announced in April, were not divulged.
The assets acquired by Niteo 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.
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 has also completed the divestment of its industrial biocides assets within its Specialty Ingredients unit to specialty materials maker – Troy Corporation – for an undisclosed price. The company announced the deal in May. The business accounted for roughly 2% of Ashland’s Specialty Ingredients unit’s revenues for the 12 months ended Mar 31, 2015.
The divestment is a part of Ashland’s strategy to dispose non-core assets and boost growth within its higher-margin core businesses that offer greater value to customers.
Ashland’s shares rose as much as around 1.4% in the trading session last Wednesday. The stock closed the day at $122.66, gaining roughly 0.6%.
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, Ferro Corporation FOE and Flexible Solutions International Inc. FSI with all sporting a Zacks Rank #1 (Strong Buy).
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