Rhodia has agreed to sell its North American specialty phosphates business to Bain Capital for $550 million. With the recent sale of other assets, including that of its food ingredients business to Danisco for $380 million earlier this year, Rhodia will achieve about $1 billion in total divestitures for 2004, surpassing the target of $840 million that was set by CEO Jean-Pierre Clamadieu.
Clamadieu, who replaced Jean-Pierre Tirouflet in October, is working to offset Rhodia’s net debt of about $4 billion, much of which was amassed in his predecessor’s acquisitions of phosphate firm Albright & Wilson and fine chemicals producer ChiRex.
Rhodia’s North American phosphate operation had sales last year of about $480 million. It manufactures phosphoric acid and phosphates for pharmaceutical, food, detergent, and other industrial applications at four plants in the U.S., two in Mexico, and one in Canada. The business will continue to be run by its existing senior management team, according to Rhodia.
Earlier this year, the company signed a letter of agreement to sell its smaller European phosphates business to Dutch phosphates maker Thermphos. The company reaped an additional $120 million in the divestiture of several small businesses, including water treatment chemicals. The sale of the North American phosphates business marks the end of Rhodia’s planned divestitures, according to Anne-Laurence de Villepin, communications director.
“These divestitures represent an important step in refocusing the group on a more limited portfolio of strategic businesses,” Clamadieu says. “We can now concentrate our resources on managing our businesses and improving their performance.”
Bain, which manages capital assets of about $17 billion, bought Rhodia’s basic chemicals division last year for an undisclosed sum.