Israel Chemicals sells product lines for $1b

Israel Chemicals

The company's revenue from the activity being sold totaled $245 million in 2016.

Israel Chemicals (TASE: ICL: NYSE: ICL) today reported the signing of an agreement to sell its fire safety and phosphorus pentasulfide product lines to SK Capital, a private investment company specializing in special materials, chemicals, and pharma, for $1 billion.

The two lines that were sold are part of Israel Chemicals' advanced additive products in its special solutions department, which the company acquired together with other activities 12 years ago for $250 million. Israel Chemicals has become a global leader in the field in recent years as a result of organic growth and complementary acquisitions.

As part of Israel Chemicals' fire safety activity, it supplies chemicals and services for fighting forest fires, including foam for putting out fires. The phosphorus pentasulfide products are used to manufacture lubricating oil, chemicals for mining applications, and pesticides.

The activities being sold contributed $245 million in sales and $79 million in operating profit to Israel Chemicals in 2016. In the 12 months ending on September 30 this year, these activities contributed $294 million to the company's revenue and $112 million to its operating profit, as a result of the recent intense wave of fires in North America.

Completion of the sale is slated for the first half of 2018, subject to a number of conditions listed in the sale agreement, including the obtaining of approval from the authorized agencies.

Israel Chemicals acting CEO Asher Grinbaum said, "This sale is another important milestone in the framework of our efforts to streamline our business and ensure a strong basis for our capital structure. Over the past year, we continued to grow in special products, while carefully managing the allocation of our capital. These measures were reflected in our financial results, which proved how Israel Chemicals is benefiting from its unique business model."

Published by Globes [online], Israel Business News - www.globes-online.com - on December 7, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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