Ashland divests Avoca unit to Mane, terms undisclosed

WILMINGTON, Del. - Ashland Inc. (NYSE: ASH), a global additives and specialty ingredients company with a market capitalization of $2.69 billion, has finalized the sale of its Avoca business to fragrance and flavor manufacturer Mane, the companies announced Monday. The transaction was completed last Monday, with the financial details remaining confidential. According to InvestingPro data, Ashland maintains a strong financial position with liquid assets exceeding short-term obligations and a healthy current ratio of 2.52.

The Avoca business, which produces the fragrance fixative sclareolide, along with offering a suite of contract manufacturing services, operates from two facilities in North Carolina and Wisconsin. This sale marks the divestiture of the last remaining entity from Ashland’s former acquisition of Pharmachem.

Guillermo Novo, Ashland’s chair and CEO, expressed gratitude to the Avoca employees for their dedication, and welcomed their continued success under Mane’s leadership. Mane CEO Samantha Mane underscored the acquisition as a reinforcement of their commitment to ingredient production for the fragrance and flavor industry.

Ashland is recognized for its focus on environmental, social, and governance (ESG) principles, serving a diverse range of markets such as construction, energy, and pharmaceuticals. The company boasts a workforce of over 3,200 employees, providing solutions in more than 100 countries.

Mane, a family-owned enterprise since 1871, stands as a major player in the global fragrances and flavors sector, with operations across 29 production facilities and presence in over 40 countries. The company has seen significant growth, with revenues surpassing €1,770 million in 2023.

The legal aspects of the sale were managed by Squire Patton Boggs on behalf of Ashland. This strategic move is part of Ashland’s ongoing efforts to streamline its portfolio and focus on its core businesses. The information for this article is based on a press release statement.

In other recent news, Ashland Inc. reported its first-quarter earnings for fiscal year 2024, with an adjusted earnings per share (EPS) of $0.28, exceeding the forecast of $0.24. However, the company fell short of its revenue forecast, reporting $405 million against the expected $431.72 million. Despite the revenue miss, Ashland reaffirmed its full-year sales guidance, projecting a range between $1.9 billion and $2.05 billion. Analyst firms have adjusted their outlooks on Ashland, with BMO Capital Markets lowering the company’s price target from $84.00 to $77.00 while maintaining a Market Perform rating. Similarly, Jefferies reduced the price target from $92.00 to $82.00, but still maintains a Buy rating, citing potential challenges in consumer confidence and market stability.

Seaport Global Securities downgraded Ashland from a Buy to a Neutral rating, reflecting concerns about its competitive position, especially in the Specialty Additives market in China. The firm noted that Ashland faces pricing challenges in its Life Sciences segment but expects stabilization by fiscal year 2025. Ashland’s management anticipates short-term headwinds to normalize in the second fiscal quarter, with a traditional seasonal increase expected in the latter half of the fiscal year. The company is focusing on manufacturing optimization and cost-saving initiatives, targeting $90 million in savings. Despite these efforts, analysts remain cautious about the timing of a broader organic recovery in Ashland’s core segments.

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