Ingevity Mulls Alternatives For Select Businesses; Sees FY24 Adj. EBITDA At High End Of View

(RTTNews) - Specialty chemicals company Ingevity Corp. (NGVT) announced Thursday that it is exploring strategic alternatives for its Performance Chemicals Industrial Specialties product line, including a potential divestiture of portions of its North Charleston site.

In a separate release, Ingevity announced preliminary fiscal year 2024 results, expecting net sales of approximately $1.40 billion, adjusted EBITDA of approximately $360 million, and free cash flow of greater than $40 million.

The full-year Adjusted EBITDA is expected to reach the high end of its previous guidance, driven by the ongoing positive impact of Performance Chemicals segment repositioning and the consistent strong performance of Performance Materials segment.

With this positive momentum, the company expects to deliver slightly above $400 million of Adjusted EBITDA in 2025.

The Adjusted EBITDA outlook in 2025 do not include any potential impact from the exploration of strategic alternatives.

The company will release fourth-quarter and fiscal year 2024 results and further outlook on February 19.

Regarding the strategic review, the company projects that exiting most of the Industrial Specialties product line will strengthen the Performance Chemicals segment further and enable it focus on higher growth and higher margin opportunities.

The process includes all Industrial Specialties pine chemical-based chemistries that serve the paper chemical, rubber, adhesive, oilfield, lubricants and industrial intermediate end-use markets, and the North Charleston, South Carolina, crude tall oil refinery.

Meanwhile, the process will not include the Performance Chemicals Road Technologies product line, nor certain lignin-based products that are currently reported in Ingevity's Industrial Specialties product line.

The strategic review may or may not result in a deal, the firm said, adding that it expects to move as swiftly as possible and communicate the path forward before the end of the year.

Luis Fernandez-Moreno, Ingevity interim president and CEO, said, "Over the last fifteen months, we have undertaken a series of initiatives to improve the performance of our business, in particular our Performance Chemicals segment. These initiatives are already leading to improved results, as demonstrated by the sequential segment EBITDA margin improvement realized during the second half of 2024."

Fernandez-Moreno added that the firm is continuing to evaluate the rest of the Ingevity portfolio, and believes that it will be well positioned for profitable growth and value creation beginning in 2025.