Ecovyst has agreed to acquire the Calabrian sulfur dioxide and related sulfur derivatives business from INEOS Enterprises for $190 million, expanding its North American footprint.

The deal includes manufacturing sites in Port Neches, Texas, and Timmins, Ontario.

"The Calabrian acquisition aligns with our strategy to deliver shareholder value by leveraging our sulfur chemistry expertise, while also diversifying our portfolio and further expanding our presence in key end use segments such as mining," said Kurt J. Bitting, Ecovyst's Chief Executive Officer.

"Ecovyst is already an established producer of sodium bisulfite, and Calabrian's sulfur dioxide and other sulfur derivative product offerings share meaningful end-use, customer, and sulfur-chemistry overlap with Ecovyst, positioning us to integrate Calabrian's product portfolio onto a familiar commercial and operational footprint. Similar to our existing businesses, Calabrian has a highly experienced and engaged management team, and a diverse base of long-standing, blue-chip customers, with a high degree of recurring sales under significant long-term contracts. In addition, the Calabrian business is characterized by strong cash generation and Adjusted EBITDA margins that are expected to be accretive to Ecovyst's portfolio," Bitting added. 

Ashley Reed, Chairman of INEOS Enterprises said, "INEOS Calabrian has been part of INEOS Enterprises for the past ten years, during which time it has delivered significant improvements in safety, operational performance and financial results. This transaction, valued at $190 million, subject to certain customary adjustments, reflects our disciplined approach to portfolio management — acquiring businesses, improving them at pace, and realizing value.

Calabrian is a strong, well-positioned semi-specialty chemicals business. However, it is not a core fit within INEOS's long-term portfolio. Ecovyst is well placed to take the business forward and support its next phase of growth".

"Consistent with our disciplined capital allocation strategy, we intend to fund the Calabrian acquisition through a combination of cash on hand and proceeds of new debt financing," said Mike Feehan, Ecovyst's Chief Financial Officer.

"Given Calabrian's Adjusted EBITDA profile, with trailing twelve-month Adjusted EBITDA of approximately $23.7 million, we expect our combined net debt leverage ratio would be approximately 2x at close of the transaction. The transaction reflects a purchase multiple of approximately 8.0x trailing twelve-month Adjusted EBITDA, which we expect to step down to below 7.0x as identified synergies are fully realized over the three years following close," said Feehan.