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WILMINGTON, Del. - Ashland Inc . (NYSE: NYSE:ASH), a global additives and specialty ingredients company, has finalized the sale of its nutraceuticals division to an affiliate of private equity firm Turnspire Capital Partners LLC. The transaction, which was completed on August 30, 2024, transferred Ashland's custom formulation and contract manufacturing operations for the nutrition market, spanning facilities in New Jersey, Utah, and Tamaulipas, Mexico.
Guillermo Novo, Ashland's chair and chief executive officer, acknowledged the dedication of the nutraceuticals employees and expressed his best wishes for their future endeavors under the new ownership, now known as Pharmachem Innovations. Ilya Koffman, managing partner at Turnspire, commended the Ashland team for their constructive approach throughout the deal and conveyed enthusiasm for Pharmachem Innovations' potential in the nutraceuticals industry.
The financial details of the deal remain confidential. Citi provided financial advisory services to Ashland, while legal advice was offered by Cravath, Swaine & Moore LLP.
Ashland, recognized for its proactive stance on environmental, social, and governance (ESG) issues, operates in a variety of markets such as architectural coatings, construction, energy, food and beverage, personal care, and pharmaceutical. The company prides itself on its workforce of approximately 3,800 employees, who are committed to delivering innovative solutions to customers in over 100 countries.
The information in this article is based on a press release statement.
In other recent news, Ashland Inc. has been the subject of attention following mixed third-quarter results. The company reported steady sales of $544 million, consistent with the prior year, while its Personal Care segment saw a 22% sales increase. However, Ashland's Life Sciences segment, particularly VP&D Pharma in Europe, faced softer demand. Adjusted EBITDA reached $139 million, with a 25.6% margin.
BMO Capital Markets has adjusted its outlook on Ashland, reducing its price target for the company's shares while maintaining a Market Perform rating. The firm acknowledged Ashland's initiatives, such as cost reductions and the sale of its nutraceuticals business, as positive developments. However, concerns were raised about the pricing environment for Ashland's Life Sciences and Specialty Additives segments.
Despite these concerns, Ashland maintains a robust financial position, with $399 million cash on hand and $1 billion in total liquidity. The company continues to prioritize portfolio optimization, share repurchases, and dividend growth. Looking forward, Ashland expects fourth-quarter sales to range between $530 million and $540 million, with adjusted EBITDA between $130 million and $140 million.
InvestingPro Insights
In the wake of Ashland Inc.'s recent divestiture, investors and industry observers are closely monitoring the company's financial health and strategic moves. With a market capitalization of $4.37 billion, Ashland's commitment to shareholder returns is evident through its aggressive share buyback strategy and a consistent increase in dividends, having raised them for five consecutive years. This is underscored by a high shareholder yield, a testament to the company's dedication to returning value to its investors.
InvestingPro data reveals a Price/Earnings (P/E) ratio of 30.39, which adjusts to a more favorable 13.33 when considering the last twelve months leading up to Q3 2024. This suggests a more attractive valuation for Ashland in the context of its earnings. Furthermore, the company's dividend yield stands at 1.81%, with a notable dividend growth of 5.19% during the same period, showcasing Ashland's ability to maintain a steady stream of income for its shareholders.
From a financial stability standpoint, one notable InvestingPro Tip highlights that Ashland's liquid assets exceed its short-term obligations, indicating a strong liquidity position. This financial resilience, coupled with the company's history of profitability over the last twelve months, provides a sense of security for stakeholders amidst the dynamic changes in the company's portfolio.
For investors seeking more in-depth analysis and additional InvestingPro Tips on Ashland, including the seven analysts who have revised their earnings expectations downwards for the upcoming period, they can explore a total of 9 tips available on InvestingPro: https://www.investing.com/pro/ASH. These insights could offer valuable perspectives for making informed investment decisions.
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