Ashland plans separation into two publicly traded companies – new Ashland and Valvoline

By Lisa Kerner

Charlotte, N.C., Sept. 22 – Ashland Inc.’s board of directors approved a plan to separate Ashland into two independent, publicly traded companies, the new Ashland and Valvoline.

The split was 10-years in the making, according to Ashland chairman and chief executive officer William A. Wulfsohn. It is the final step in Ashland’s transformation from an oil refiner and marketer to a specialty chemicals company.

The new Ashland will be a premier specialty chemicals company while Valvoline will be an industry-leading engine and automotive maintenance business, according to a news release.

Ashland intends for the separation to be tax free for Ashland shareholders. Immediately following the separation, Ashland shareholders will own shares of both the new Ashland and Valvoline.

Wulfsohn, chief financial officer Kevin Willis and other executives discussed the proposed split during a conference call on Tuesday. The executive did not disclose expected costs associated with the separation, which will take about one year to complete.

Valvoline will keep its name and a new name will be identified for Ashland, said Wulfsohn.

Willis said Ashland wants to make the separation cost neutral, and dividend levels have yet to be determined.

At June 30, new Ashland had revenues of $3.6 billion and Valvoline’s revenues totaled $2 billion.

Pro forma targeted ratings for both companies are mid to high BB. New Ashland’s pro forma gross debt to EBITDA is about three times, while Valvoline’s is two times, according to presentation materials.

BofA Merrill Lynch is acting as financial adviser on the transaction.

Ashland is a Covington, Ky.-based specialty chemicals company.

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