Ashland to acquire Pharmachem Lab for $660 million

COVINGTON, US: Ashland Global Holdings Inc (ASH) said that its subsidiary has signed a definitive agreement to acquire privately owned Pharmachem Laboratories Inc, a leading provider of quality ingredients to the global health and wellness industries and high-value differentiated products to fragrance and flavour houses.

Under terms of the stock purchase agreement, Ashland will pay $660 million in an all-cash transaction that is expected to be completed before the end of the June quarter.

With annual revenues of approximately $300 million and 14 manufacturing facilities in US and Mexico, New Jersey-based Pharmachem develops, manufactures and supplies custom and branded nutritional and fragrance products. The 38-year-old company, whose customers are some of the best-known consumer brands in the world, sells to the following end markets:

• Nutrition and health (43 percent of total sales) - Key supplier to $39 billion  vitamin and dietary supplement market;

• Fragrance and flavours (33 percent) - Primary application as an ingredient for fragrances in consumer products such as laundry detergents and fine perfumes;

• Food, beverage and personal care (15 percent) - Ingredients used in products sold through speciality retailers, multi-level marketers, and topical skin care and cosmetics; and

• Custom manufacturing (9 percent) - Services include refining, granulation and spray drying. Also, operates one of the largest custom extraction facilities for natural ingredients in North America.  

"The acquisition of Pharmachem offers a number of exciting growth opportunities in higher-margin end markets while also strengthening our speciality product line. This combination will enhance our position in fast-growing nutraceutical end markets, open a new opportunity within fragrances and flavours, and strengthen Ashland's food ingredient business by adding customised functional solutions," said William Wulfsohn, Ashland chairman and CEO.

"This is a great strategic fit for Pharmachem as we look to build on our well-established track record of growth and financial performance. We have the opportunity to create something unique in our industry by combining Pharmachem's custom manufacturing capabilities with Ashland's formulation knowledge and excipients expertise. Together we can drive the next phase of Pharmachem's growth while contributing to Ashland's vision of creating the world's premier specialty chemicals company," said Colin MacIntyre, Pharmachem CEO.

BofA Merrill Lynch is acting as financial advisor to Ashland and Cravath, Swaine & Moore LLP is acting as legal advisor.

Moelis & Company LLC is acting as financial advisor and Arnold & Porter Kaye Scholer LLP is acting as legal advisor.

© Worldofchemicals News 

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