KINGSPORT — Eastman Chemical Co. looks to sell its rubber additives and related product lines, assets and technology for $800 million.
Eastman entered the agreement with an affiliate of One Rock Capital Partners, LLC.
The agreement is expected to be completed in the second half of 2021.
“This announcement is part of our ongoing effort to improve the performance of our Additives & Functional Products segment,” said Mark Costa, board chair and chief executive officer at Eastman, in a press release. “After reviewing strategic options, we believe this action is the most beneficial to Eastman and the rubber additives business.
“We are pleased to reach this agreement with One Rock and to have a clear path forward for the rubber additives business.”
According to a press release, the $800 million sale price 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.
The company expects the sale will be either neutral or accretive to adjusted earnings per share in 2022.
Tony W. Lee, managing partner of One Rock, said the following in a press release:
“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.”
The rubber additives include Crystex insoluble sulfur and Santoflex antidegradants, which, according to Eastman’s website, are used to control the process of manufacturing rubber, while improving durability, flexibility and appearance in tires and other products.