Ashland has agreed to acquire International Specialty Products (ISP) for $3.2 billion in cash. The deal expands Ashland's sales by roughly 26%, and improves its presence in high-growth markets such as personal care, pharmaceuticals, and energy. ISP reported sales of about $1.6 billion and Ebitda of about $360 million for the twelve months ended March 31, 2011. The combined companies have pro forma sales of about $7.6 billion for the twelve months ended March 31, with about half of that generated outside North America. ISP posted a Ebitda margin of 22.5% for the twelve months ended March 31, roughly 10 percentage points of Ashland's Ebitda margin. Combined Ebitda is $1.1 billion, and the companies' combined functional ingredients business is expected to account for half of Ebitda, Ashland says. "This defining transaction enables us to significantly expand our market positions in higher margin, higher growth and less cyclical global markets like personal care and pharmaceuticals,"says Ashland chairman and CEO James O'Brien.
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