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Ashland acquires ingredients maker Pharmachem Laboratories for $ 660 mn

Deal to strengthen Ashland's position in fast-growing nutraceuticals market

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BS B2B Bureau Covington, Kentucky (USA)

Last Updated : Apr 18 2017 | 11:36 AM IST

In an all-cash transaction, specialty chemicals company Ashland Global Holdings Inc has agreed to acquire privately owned Pharmachem Laboratories Inc, the US-based provider of ingredients to the global health and wellness industries and high-value differentiated products to fragrance and flavour houses, for $ 660 million. While Pharmachem is one of the leading suppliers to $ 39 billion vitamin and dietary supplement market, it operates one of the largest custom extraction facilities for natural ingredients in North America.

With annual revenues of approximately $ 300 million and 14 manufacturing facilities in the US and Mexico, New Jersey-based Pharmachem develops, manufactures and supplies custom and branded nutritional and fragrance products. The 38-year-old company sells to the end markets such as nutrition and health (43 percent of total sales); fragrance and flavours (33 percent); food, beverage & personal care (15 percent); and custom manufacturing (9 percent).

“The acquisition of Pharmachem offers a number of exciting growth opportunities in higher-margin end markets while also strengthening our specialty 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. In combining Pharmachem and Ashland, we can leverage our extensive sales channels, technical service network and global applications labs to accelerate Pharmachem's growth,” commented William Wulfsohn, chairman and chief executive officer, Ashland.

Ashland anticipates achieving meaningful cost synergies from leveraging combined capabilities, as well as tax synergies driven by the integration of Pharmachem into Ashland's global business structure.