The US-based chemical producer WR Grace & Co has approved a plan to separate into two independent, publicly traded companies. The two companies, to be named prior to closing, will be ‘New Grace’, comprised of Grace’s catalysts technologies and materials technologies business segments (excluding the Darex packaging business), and ‘New GCP’, comprised of Grace’s construction products business segment and the Darex packaging business. The separation transaction is intended to be a tax-free spin-off to Grace shareholders for US federal income tax purposes, and is expected to be completed in approximately 12 months.
“Grace has created significant shareholder value by focusing on our customers, driving innovation and growth, and executing a disciplined capital allocation strategy,” said Fred Festa, chairman and chief executive officer, WR Grace.
The company believes that the planned separation will enhance strategic focus. “Two strong, focused operating companies with industry-leading market and technology positions, strong free cash flow and high returns on invested capital will be created through this transaction. Each company will be positioned to capture its distinct growth opportunities, focused on its unique customers, with more efficient capital allocation and the scale and cash flow needed for growth and value creation” added the press release.
In addition, New Grace and New GCP is expected to provide unique and compelling investment opportunities with different growth drivers and simpler investor theses. Investors will have the opportunity to evaluate and invest in each business based on its respective financial profile, performance and prospects.
Post separation, the company expects New Grace and New GCP to have sales of approximately $1.8 billion and $1.5 billion, respectively.
“Grace has created significant shareholder value by focusing on our customers, driving innovation and growth, and executing a disciplined capital allocation strategy,” said Fred Festa, chairman and chief executive officer, WR Grace.
The company believes that the planned separation will enhance strategic focus. “Two strong, focused operating companies with industry-leading market and technology positions, strong free cash flow and high returns on invested capital will be created through this transaction. Each company will be positioned to capture its distinct growth opportunities, focused on its unique customers, with more efficient capital allocation and the scale and cash flow needed for growth and value creation” added the press release.
In addition, New Grace and New GCP is expected to provide unique and compelling investment opportunities with different growth drivers and simpler investor theses. Investors will have the opportunity to evaluate and invest in each business based on its respective financial profile, performance and prospects.
Post separation, the company expects New Grace and New GCP to have sales of approximately $1.8 billion and $1.5 billion, respectively.