Daily News: August 23, 2017

Wells Fargo Agents $925MM Facility for Ingevity


Ingevity acquired Georgia-Pacific’s pine chemicals business for a cash purchase price of $315 million.

The company will fund this transaction through an amendment and extension of its bank credit facility, which closed earlier this week. According to a related 8-K filing, Wells Fargo Bank was administrative agent for the transaction, which was led by Wells Fargo Securities, J.P. Morgan Securities and Merrill Lynch. The facility is comprised of a $550 million revolving credit facility and a $375 million term loan. The $925 million facility matures in May 2022 and includes 13 participating banks.

Citi acted as exclusive financial advisor and Kirkland & Ellis acted as legal counsel to Ingevity.

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, paints and other coatings, inks, metalworking, mining, oilfield, packaging and rubber processing. Approximately 90% of its revenues are in North America

In purchasing the pine chemicals business, Ingevity will 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.

The acquisition is subject to certain regulatory approvals and other customary closing conditions, and Ingevity expects to close on the transaction in late 2017.

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 will not acquire Georgia-Pacific’s merchant CTO or crude sulfate turpentine business which will be retained and operated by Georgia-Pacific.

“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.”

Ingevity provides specialty chemicals and high-performance carbon materials and technologies that help customers solve complex problems.