£52.8m German disposal for Croda
CRODA, the natural chemicals producer, has announced the £52.8m sale of a site in Germany and its associated business to KLK Emmerich GmbH.
Goole-based Croda said the deal “largely completes” its restructuring programme which has seen it re-position its oleochemical operations following the acquisition of Uniqema in 2006.
The Emmerich Site produces fatty acids and glycerine, most of which were sold into Croda’s industrial specialities market.
Croda supplies some of the world’s best known skincare and cosmetics companies such as L’Oreal, Chanel, Clarins, Estee Lauder and Procter & Gamble.
Croda, which acquired the Emmerich site as part of the Uniqema acquisition, said proceeds from the sale proceeds would initially be used to reduce its net debt which stood at £292.7m on March 31.
KLK Emmerich GmbH is a subsidiary of the KLK Group (Kuala Lumpur Kepong Berhad).
KLK is to assume IAS19 retirement benefit obligations relating to the business of approximately £30.7m as part of the transaction.
Therefore cash payable at the completion of the deal will be £22.1m.
Robin Johnson of law firm Eversheds in Leeds advised Croda on the disposal.
The Emmerciah site business had sales of £80m and made an operating loss of £2.1m in 2009, with net operating assets of £37.7 m at December 31.
Croda will continue to supply and source some products to and from the business under normal third party commercial terms.
Croda reported last month that over the first quarter of 2010 quarterly sales and profits were at record level.
Group sales increased 14.7% to £264.7m compared to £230.8m over the same period last year.
Group pre-tax profit from continuing operations almost doubled to £42.4m from £21.7m in 2009.
