ICI Announces sale of Quest
Nov 22 2006
The Quest business is to be sold to Givaudan for £1,200 million GBP
Imperial Chemical Industries PLC has reached an agreement to sell Quest, its flavours and fragrance business, to Givaudan for a gross cash consideration of 1,200 million GBP , subject to closing balance sheet adjustments, including working capital and net debt.Of the gross consideration, around 70 million GBP will be used to provide for deal-related tax and costs. Of the balance, approximately 230 million GBP will be used to reduce ICI's post-retirement benefit deficits and around 900 million GBP will be used in the near term to eliminate net debt. The transaction is expected to be earnings neutral in 2006; have an implied current year EBITDA multiple of over 15 times, and should give rise to a profit after tax of around 900 million GBP. This will be accounted for as a special item in ICI's Income Statement when the deal has been completed. Quest will be treated as "held for sale" in the year end accounts.
Subject to approval by ICI shareholders, regulatory approval and employee consultation, it is hoped that completion will take place during Quarter 1, 2007. An Extraordinary General Meeting will be held in due course. Details of the EGM will be announced separately.
Under ICI's ownership, Quest was expected to improve operating performance through delivering growth and margin enhancement in the medium-term. The consideration obtained by ICI reflects the strategic value of the business as a leading player in an attractive industry, as well as the expected performance improvement.
John McAdam, Chief Executive of ICI, commented: "The sale of Quest represents another major step towards realigning ICI. The disposal proceeds will allow us to accelerate our investments in our strong coatings, adhesives and other specialty chemicals businesses to deliver higher levels of profitable growth."
He added: "I would like to thank the Quest team for their outstanding efforts in rebuilding the performance and value of the Quest business over the past three years. This has resulted in the creation of significant shareholder value."
In 2005 Quest had sales of 560 million GBP and a trading profit of 52 million GBP. Quest is headquartered in Naarden, The Netherlands, and employs around 3,400 globally with major activities in the US, UK, Continental Europe and Asia Pacific. As at 31 December 2005, Quest had gross assets of 374 million GBP.
Contact details:
ICI Group :John Dawson, Vice President for Investor Relations & Corporate Communications
Tel: +44 (0) 20 7009 5315
Regina S. Kilfoyle, Director of Corporate Communications
Tel: +44 (0) 20 7009 5410
Brunswick: Kevin Byram / Conor McClafferty
Tel: +44 (0) 20 7404 5959
About ICI
ICI is one of the world's major specialty products and paints businesses. Alongside Quest, the Group's principal businesses are National Starch and ICI Paints, which together account for more than 72% of ICI's sales. Today around a quarter of ICI's sales are made in Asia Pacific, with 30% in Europe and over 40% in the Americas.
ICI products today include flavours and starches for the food industry, fragrances and specialty polymers for personal care products, adhesives for the electronics and packaging markets as well as a wide range of decorative coatings and specialty products for domestic use and the construction industry. Listed on both the London and New York Stock Exchanges, ICI is a member of the FTSE100, FTSE4Good and the Dow Jones Sustainability Index. ICI has approximately 30,000 employees worldwide and, including the recently divested Uniqema business, had sales in 2005 of 5.8 billion GBP.
About Givaudan
Givaudan is the leading company in the flavours and fragrance industry with a vision to be the Essential Source of Sensory Innovation for customers, driven by a mutual passion for excellence. Through unique sensory expertise and consumer insight, Givaudan provides customers with the taste and smell profiles that are key to their products' success. Givaudan, based in Vernier, Switzerland, serves global, regional and local customers around the world. In 2005, the company generated sales of around CHF 2.8 billion, with a workforce of almost 6,000 and a presence in over 100 countries.
