ICL Sells Oil Additives Business


Specialty chemicals and minerals company ICL entered into an agreement to sell its fire safety and oil additives business units to private investment firm SK Capital for roughly $1 billion, the companies announced late last week. The acquisition is expected to close in the first half of next year, pending the completion of customary closing conditions.

ICLs fire safety business supplies class A and B foams to extinguish fires as well as chemicals and services for fighting wild fires. Its oil additives business products are used for the production of various lubricant oil additives and mining chemicals.

During the twelve months ended September 20, 2017, and mainly as a result of an unusually high wild fire season in North America, the [fire safety and additives business units] contributed approximately $294 million to ICLs sales and approximately $112 million to ICLs operating income, the press release states.

ICL cites low synergies with its core mineral chains as its primary motivation behind the sale. This sale constitutes another step towards fulfilling the targets of focusing ICLs businesses and selling low synergy assets. The divestment will reduce debt leverage, and provide flexibility for the development of innovation and growth in ICLs specialty products and in precision agriculture, said ICLs Executive Chairman Johanan Locker.

The oil additives and fire safety business units, which were acquired in 2005, are a part of ICLs Specialty Solutions Advanced Additives business line. It has operations in North and South America, Europe, Australia and Asia.

Tel Aviv, Israel-based ICL is a global manufacturer primarily serving the agricultural, food and engineered materials markets. According to its website, the company is a leading provider of pure phosphoric acid and produces roughly a third of the worlds bromine supply. Established by the Israeli government in 1968, the company was acquired by the Ofer Group in 1999 and now roughly 70 percent of company shares are in some way held by the public.

SK Capital is a private investment firm concentrating on the specialty materials, chemicals and pharmaceuticals markets. According to its website, the New York City-based firm focuses on buyouts, recapitalizations, take-privates and growth equity investments.

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Additives    Business    Mergers & Acquisitions