Ingevity Corporation is exploring strategic alternatives for the company’s Performance Chemicals Industrial Specialties product line, including a potential divestiture of portions of its North Charleston site.

Ingevity noted that this 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. This 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.

“Ingevity’s management team and Board are committed to taking aggressive action to deliver more shareholder value,” said Luis Fernandez-Moreno, Ingevity interim president and CEO. “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.”

“Exiting most of the Industrial Specialties product line will strengthen the Performance Chemicals segment further and enable us to focus our attention on higher growth and higher margin opportunities within our portfolio while improving the company’s earnings and cash flow profile,” continued Fernandez-Moreno. “During this process, we will continue to provide exceptional service and support to our Industrial Specialties customers.”

“We are continuing to evaluate the rest of the Ingevity portfolio and remain committed to taking appropriate actions, including ensuring our cost structure is aligned with our objective of being a specialty chemicals leader. We believe we will be well positioned for profitable growth and value creation beginning in 2025,” stated Fernandez-Moreno.

Ingevity cannot assure its strategic review will result in a transaction. The company expects to move as swiftly as possible and communicate the path forward before the end of the year and does not intend to disclose further developments unless and until it is determined that further disclosure is appropriate.

Preliminary fiscal year 2024 financial results

Ingevity announced today unaudited preliminary financial results for fiscal year 2024. These preliminary results remain subject to completion of the company’s fiscal year financial audit. The company expects to report Net sales of approximately $1.40 billion, Adjusted EBITDA of approximately $360 million, and free cash flow of greater than $40 million.

“We are pleased to announce that our full year Adjusted EBITDA is expected to reach the high end of our previous guidance and free cash flow to significantly exceed prior guidance. This achievement is driven by the ongoing positive impact of our Performance Chemicals segment repositioning and the consistent strong performance of our Performance Materials segment, which has delivered another robust quarter. With this positive momentum, we have increased confidence in our ability to deliver slightly above $400 million of Adjusted EBITDA in 2025,” said Fernandez-Moreno. “We will provide more detail on our 2025 guidance at our upcoming fourth-quarter and fiscal year 2024 earnings call scheduled on February 19, 2025.”

The company’s expectations for Adjusted EBITDA in 2025 do not include any potential impact from the exploration of strategic alternatives announced today.