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Tronox to buy Alkali Chemicals for $1.64 billion

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Staff writer ▼ | February 5, 2015
Tronox Limited has signed a definitive agreement with FMC Corporation to acquire its Alkali Chemicals business for $1.64 billion.
Tronox
Acquisition   FMC Corporation wants to sell its business
The transaction is expected to be significantly accretive to Tronox's EBITDA, free cash flow and earnings upon closing. Tronox will fund the acquisition through existing cash and new debt pursuant to signed commitments from multiple banks.

The transaction, which has been approved by the boards of directors of both companies, is expected to close in the first quarter of 2015 and is subject to customary closing conditions.

Tom Casey, chairman and CEO of Tronox, said: "We are very pleased to welcome Alkali Chemicals to Tronox. With its industry-leading position in markets complementary to ours, Alkali Chemicals brings strong operational and financial performance. Over the last five years, it has consistently delivered EBITDA margins in excess of 20 percent and converted approximately 75 percent of its EBITDA to free cash flow. It is a recognized leader in its industry for safety performance.

Together, we will form a leading inorganic chemicals company with more stable revenue, cash flow and EBITDA streams and higher net income. We will have approximately $2.6 billion in sales with the scale, stability and financial strength to pursue our strategic growth initiatives. We will operate Alkali Chemicals as a separate business unit and reporting segment.

"Alkali Chemicals brings to Tronox more than 1,000 new colleagues and a senior management team that averages 23 years' experience in the chemicals industry and 13 years' experience with Alkali Chemicals. One of the most important elements in our decision to acquire Alkali Chemicals is the excellence of the employees and management team. We look forward to joining with them to build a great company from the ground up."

"We are very pleased to sell our Alkali Chemicals business to a leading, global mining and minerals company like Tronox," said Pierre Brondeau, FMC president, CEO and chairman.

"We achieved our goal of finding the best owner for this business. This is a natural fit for Alkali Chemicals, which will thrive as a new, strategic business at Tronox."

The purchase price of $1.64 billion will be funded with approximately $1 billion of cash and approximately $600 million of new debt pursuant to signed commitments received from UBS Investment Bank, Credit Suisse and RBC Capital Markets. Tronox believes that the attractive deleveraging profile of the combined entity will reduce the net leverage ratio to less than 4.0x in 12 to 15 months.


 

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