Ingevity has reached an agreement to sell its crude tall oil refinery in North Charleston, South Carolina, the latest in a series of restructuring steps the past two years.
Mainstream Pine Products agreed to buy the facility along with most of Ingevity’s Industrial Specialties product line for $110 million at closing in a deal that includes clauses that could eventually net Ingevity up to $19 million more. The transaction is subject to standard conditions, but Ingevity said it expects it to close by early next year.
The Industrial Specialties unit includes Ingevity’s operations in the lubricant industry, which supply corrosion inhibitors, emulsifiers and lubricity additives for metalworking fluids and other types of lubricants.
Mainstream Pine Products is headquartered in Goose Creek, South Carolina, which like North Charleston is on the outskirts of the coastal city of Charleston. Founded in 2019, Mainstream already operates its own tall oil refinery in Goose Creek.
Ingevity said in January that it would consider selling the Industrial Specialties unit to strengthen its financial position and allow it to focus on other operations. Its remaining businesses include a Performance Materials unit that supplies activated carbon; its Advanced Polymer Technologies unit, which supplies caprolactone polymers; and the road technologies part of its Performance Chemicals unit.
“This transaction marks a significant milestone for Ingevity, reducing portfolio volatility, strengthening our margin and cash flow profile and enhancing future strategic optionality,” Ingevity President and CEO Dave Li said in a Sept. 4 news release. “The transaction proceeds will enable us to accelerate deleveraging and provide additional capital allocation flexibility.”
Ingevity is a specialty chemical business that tries to help customer businesses become more sustainable by providing chemicals derived from renewable materials.
Since 2023 it has closed plants in Louisiana and Arkansas and embarked on a $250 million restructuring plan. It reported sales of $1.4 billion and earnings of $363 million for 2024, down from $1.7 billion and $463 million for 2022.