A recent sale agreement of Croda businesses will not have an impact on its Atlas Point site near New Castle.
The UK company agreed to sell most of its n Performance Technologies and Industrial Chemicals (PTIC) businesses to a wholly-owned subsidiary of Cargill Inc. for an enterprise value of about $1.2 billion. The businesses employ about 1,000.
“Atlas Point remains with Croda,” said spokesman David Bishop. “We are excited about the potential of the bio-based ingredients that we produce there…particularly in-home care and personal care markets.”
The divested business includes plants, five manufacturing facilities together, and laboratory facilities supporting key aspects of the divested business activities in smart materials, energy technologies, and industrial chemicals.
The retained parts of the business will support the Group’s Consumer Care and Life Sciences sectors.
These retained activities will become the Industrial Specialties. In the future, IS will generate additional revenues from a new supply agreement, whereby Croda will supply certain ingredients from its retained manufacturing plants to Cargill. Similarly, Cargill will enter a supply agreement to provide Croda with certain ingredients from the divested business’ manufacturing plants.
The divestment delivers Croda’s transition into a focused life sciences and consumer care company, with these two sectors accounting for well over 90% of the Group’s 2020 adjusted operating profit following completion. Croda intends to reinvest proceeds from the transaction into faster growth areas, increasing its exposure to health care and further developing its position in consumer care and crop care markets.
Croda and Cargill are working together to separate the two businesses, with completion of the transaction expected in summer 2022. The transaction is subject to receiving customary regulatory approvals but is not subject to approval by Croda’s or Cargill’s shareholders.
Steve Foots, CEO of Croda, said, “Today’s announcement completes our transition into a pure-play consumer and life sciences company. We will focus our capital and resources on delivering sustainable solutions and scaling our consumer, health, and crop care technologies, leading to consistent sales growth and an even stronger profit margin. Cargill is a company with a distinguished history and strong values. Under its ownership, the divested business and our talented, hardworking employees can look forward to a bright future.”
Established in 1925, UK-based Croda has 5,600 employees working across manufacturing sites and offices worldwide.
Croda was in the news in Delaware when a leak in 2018 at a newly built Ethylene Oxide plant closed to traffic at the Delaware Memorial bridge for a time and led to fines and a settlement with DNREC. The plant was restarted this year.