Boston, MA 08/29/2014 (wallstreetpr) – The Dow Chemical Company (NYSE:DOW) appears to be making good its promise to slim down for the sake of creating value for the investors. In the latest move, the company announced that two assets namely AgroFresh and Angus Chemical are up for sale. It seeks to raise at least $1.75 billion from the sale of the assets. More asset divestitures are expected from the company because it seeks to raise about $6 from such transactions in the near future.
Singular business focus
The company was reported this week as having tapped financial advisors to help with the disposal of the two assets. Reports cited Morgan Stanley (NYSE:MS) and a former banker at Citigroup Inc (NYSE:C) as being tapped for the job. In December last year, The Dow Chemical announced plans to streamline and that included selling assets that are less-profitable or those that are not in-line with the company’s core operations. The idea was that disposing such assets would give the company singular focus to its core business while also unlocking cash that can be channeled to other promising projects. Furthermore, the company felt that it would please investors by selling non-core assets because investor like putting their money in companies that focus on their primary business.
The Dow Chemical Company (NYSE:DOW) originally said they would sell assets worth about $4.5 billion, but later raise the target by $1.5 billion, which means they are looking to raise $6 billion through asset divestiture.
Angus Chemical, which is one of the latest assets market for sale, has an annual Ebitda of about $115 million and the company is expected to sell it at 10 times the Ebitda amount. The company manufactures products that have a wide range of industrial applications. AgrosFresh is another asset to go under the slimming program. The business serves customers with agricultural products that are mainly used in the transportation of fresh produce. The business will also be sold at 10 times its annual Ebitda.
