Elementis PLC (LSE:ELM) said it has agreed to sell its Chromium business to Yildirim Group for an enterprise value of US$170mln.
The sale follows a strategic review of the Chromium business announced in the spring.
"Whilst Chromium has been a part of Elementis for many years, our strategic review concluded that the interests of all stakeholders would now be best served by a sale of the business,” commented Paul Waterman, CEO of Elementis in a statement.
“Chromium is an attractive business with a strong market position, but it increasingly sat outside of this strategic framework. We are confident that Yildirim will take the business forward in the best long-term interests of its customers and employees," he added.
The deal includes the transfer of environmental liabilities of US$35mln and other liabilities of US$8mln, with the total cash proceeds on completion expected to be around US$119mln, the specialty chemicals company said.
The Chromium business reported adjusted operating profit of US$14mln on sales of $171mln in the year to end-June 2022.
The cash proceeds from the sale will be used to reduce debt, the FTSE 250 company said.
Waterman said Elementis’ Personal Care, Coatings and Talc businesses “are focused on developing advantaged, high-value products to drive revenue growth and margin expansion”.
“Going forward, I'm confident the focused implementation of our Innovation, Growth & Efficiency strategy positions us to deliver on our medium-term financial objectives and generate significant shareholder value,” he concluded.
Completion of the disposal, which is subject to US regulatory approval, is expected before the end of the first quarter of 2023.