Eastman, One Rock agree for rubber additives business sale

7:08 AM, 11th June 2021
Eastman Chemical Company will sell to an affiliate of One Rock Capital Partners LLC, its rubber additives and other product lines and related assets & technology of the global tire additives business of its additives & functional products segment. (Image © Pixabay GmbH)

KINGSPORT, US: Eastman Chemical Company announced it has entered into a definitive agreement with an affiliate of One Rock Capital Partners LLC to sell the rubber additives (including Crystex™ insoluble sulfur and Santoflex™ antidegradants) and other product lines and related assets and technology of the global tire additives business of its Additives & Functional Products segment. The sale does not include the Eastman Impera™ and other performance resins product lines of the tire additives business.

The sale is expected to be completed in the second half of 2021 and it expects the sale will be either neutral or accretive to adjusted earnings per share in 2022.

The total sale price of $800 million consists of $725 million cash at closing and an additional amount of up to $75 million to be paid based on performance of the rubber additives business post-closing through 2023. The final purchase price is subject to working capital and other adjustments at closing.

Beginning in the second quarter of 2021 and until sale, the assets of the rubber additives business will be reported as held for sale. The company expects to recognize asset impairments or a loss from the agreement and completion of the sale.

"This announcement is part of our ongoing effort to improve the performance of our additives & functional products segment. We are pleased to reach this agreement with One Rock and to have a clear path forward for the rubber additives business. We continue to evaluate other actions to improve our AFP segment," said Mark Costa, board chair and chief executive officer.

"Eastman's tire additives business is the global leader, known for high-performance, mission-critical products and technical leadership. We are excited to partner with the business' highly experienced management team to further strengthen its unparalleled product portfolio and drive its growth as an independent company,” said Tony Lee, managing partner of One Rock.
Credit Suisse and JP Morgan served as financial advisors and Jones Day served as legal advisor to Eastman.

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