Ashland sells Water Technologies business to Clayton, Dubilier & Rice for $1.8 bn

Ashland Inc has signed a definitive agreement to sell Ashland Water Technologies (AWT) to a fund managed by Clayton, Dubilier & Rice in a transaction valued at approximately $1.8 billion. The transaction is expected to close by the end of Ashland's fiscal year on September 30, 2014, contingent on certain customary regulatory approvals, standard closing conditions and completion of required employee information and consultation processes.
 
With annual sales of $1.7 billion and approximately 3,000 employees worldwide, Water Technologies is a leading supplier of specialty chemicals and services to the pulp and paper and industrial water markets. Over the past year, the commercial unit has reported significant improvements in its business and financial performance as a result of a plan to simplify the organisation, focus on key growth opportunities, and deliver better service and value to customers. The result has been steady profit growth and improved margins.
 
James J O’Brien, Chairman and Chief Executive Officer, Ashland, said, “This divestiture allows us to focus on our core specialty chemicals business and to accelerate return of capital to shareholders, while Water Technologies should have an opportunity to invest in continued growth under new ownership. We believe this transaction, when combined with our ongoing global restructuring, will help position Ashland for EBITDA margins that rank among the top 25 percent of specialty chemical companies."
 
Founded in 1978, Clayton, Dubilier & Rice (CD&R) is a private investment firm with an investment strategy predicated on producing financial returns through building stronger, more profitable businesses. Since inception, CD&R has managed the investment of more than $19 billion in 59 businesses with an aggregate transaction value of more than $90 billion.
 
George K Jaquette, Partner, CD&R, said, “Ashland Water Technologies has many attractive features, including a very strong competitive position which reflects its global scale, deep set of service capabilities and innovation leadership. We look forward to working with the management team to build upon the company's market leadership position.”