Ingevity Corp. recently announced it has reached an agreement with Georgia-Pacific to acquire its pine chemicals business for a cash purchase price of $315 million. Ingevity reportedly expects to close on the transaction in late 2017.
Georgia-Pacific’s pine chemicals business manufactures and sells pine-based tall oil fatty acids, tall oil rosin, and tall oil rosin esters used in adhesives, cleaners, coatings, inks, and more. Approximately 90% of its revenues are in North America. The business manufactures the majority of its products at a Georgia-Pacific site in Crossett, Ark., and employs approximately 70 people.
In purchasing the pine chemicals business, Ingevity will reportedly acquire the pine chemicals-related assets at the Crossett plant, saleable inventory, customer lists and the book of business, as well as various patents and trade names associated with acquired product lines.
Separately, Ingevity will enter into a 20-year, market-based crude tall oil (CTO) supply contract with certain of Georgia-Pacific’s paper mill operations.
“Ingevity’s and Georgia-Pacific’s pine chemicals businesses are very complementary,” said Michael Wilson, Ingevity president and CEO. “By combining the companies, we will have a stronger, more competitive pine chemicals business. Our Performance Chemicals segment has recently shown improvement. This acquisition will provide a stronger platform from which we will accelerate profitable growth.”