Ashland initiates buyback and announces sale of adhesives business

Ashland Global Holdings, Inc. has entered into an uncollared accelerated share repurchase agreement (ASR) with JPMorgan Chase Bank, National Association, to repurchase a total of $450 million of Ashland common stock, with an initial delivery of approximately 3.9 million shares. The program is subject to the $1 billion share repurchase program approved by Ashland’s board of directors on March 15, 2018, of which $800 million is outstanding.

The ASR Agreement will be terminated no later than March 31, 2022, but may be terminated early under certain circumstances. JPMorgan Chase Bank, National Association may be required to deliver additional common stock to Ashland, or under certain circumstances, Ashland may be required to deliver common stock or make a cash payment at its option.

Ashlands’ strong balance sheet, attractive free cash flow generation and net proceeds from a sale of high-quality adhesives provide significant investment in our key business strategies and growth initiatives, as well as the opportunity to return capital to shareholders, said Guillermo Novo , chairman and CEO officer, Ashland.

The sale of high-quality adhesives was announced a few days before the ASR. The company’s wholly owned subsidiary, Ashland LLC, has signed a definitive agreement to sell its performance adhesives business to Arkema in a cash transaction valued at approximately $1.65 billion or 20 times LTM EBITDA¹. The transaction is expected to close by the end of calendar year 2021, subject to regulatory approval and other customary closing conditions.

According to the company, Ashland’s performance adhesives business has a portfolio of products that are well positioned in the market and valuable technologies with distinctive performance for customers in a variety of applications and markets.

Ashland says it expects net proceeds from the sale to be between $1.2 billion and $1.3 billion. The company says it will use the proceeds to invest in the growth of its core activities.

Ashland says the transaction is being driven by its strategy of focusing its resources on expanding its additives and ingredients portfolio.

1. Based on $82 million EBITDA for the performance adhesives business for the 12 months ended June 30, 2021. EBITDA represents operating income plus depreciation and amortization. EBITDA is a non-GAAP financial measure. See Ashlands Periodic Reports on Forms 10-K and 10-Q for reconciliations for the relevant time periods.