Eastman Chemical Company reported it has gone into a definitive agreement with an affiliate of One Rock Capital Partners, LLC (“One Rock”) to sell the rubber additives (counting Crystex? insoluble sulfur and Santoflex? hostile to degradants) and other product lines and related assets and technology of the global tire additives business of its Additives and Functional Products portion. The sale does exclude the Eastman Impera? and other performance resins product lines of the tire additives business.
The absolute sale price of $800 million comprises of $725 million cash at shutting and an extra measure of up to $75 million to be paid dependent on performance of the rubber additives business post-shutting through 2023. The last purchase price is liable to working capital and different adjustments at shutting. The company expects the sale will be either neutral or accretive to changed earnings per share in 2022.
“This declaration is important for our continuous effort to improve the performance of our Additives and Functional Products fragment. Subsequent to surveying key choices, we accept this activity is the most helpful to Eastman and the rubber additives business,” said Mark Costa, Board Chair and Chief Executive Officer. “We are satisfied to agree with One Rock and to have a make way forward for the rubber additives business. We keep on assessing different activities to improve our AFP fragment.” Tony W. Lee, Managing Partner of One Rock, said, “Eastman’s tire additives business is the global leader, known for elite, crucial products and technical leadership. We are eager to join forces with the business’ profoundly capable supervisory crew to additionally reinforce its unmatched product portfolio and drive its development as an autonomous company.”
The sale, subject to regulatory approvals and fulfillment of other customary shutting conditions, is relied upon to be finished in the second 50% of 2021. The agreement contains customary portrayals, warranties, and covenants of the two players including, in addition to other things, for Eastman to direct the rubber additives business in the ordinary course predictable with past training. Starting in the second quarter of 2021 and until sale, the assets of the rubber additives business will be reported as held for sale. The company hopes to perceive resource weaknesses or a misfortune from the agreement and finish of the sale. Credit Suisse and JP Morgan filled in as financial advisors and Jones Day filled in as legal advisor to Eastman.