Clariant To Exit Pharma Chemicals

Becoming the latest big chemical maker to leave the fine chemicals business, specialties firm Clariant has agreed to sell its Pharmaceutical Fine Chemicals unit to the private equity firm TowerBrook Capital Partners. The sale price is about $88 million, $32 million of which won't be paid for two years.

The Pharmaceutical Fine Chemicals business had 2005 sales of around $168 million. It includes much of the former BTP, a company that Clariant acquired for $1.8 billion in 2000 at the height of the chemical industry???s love affair with pharmaceutical chemical production.

Since then, growth and profits in the field have plummeted, prompting firms such as Avecia and Rhodia to leave. Avecia sold its pharmaceutical custom synthesis business to Nicholas Piramal India Ltd. late last year, while Rhodia recently sold its Pharmaceutical Solutions unit to Shasun Chemicals & Drugs, also of India.

Lanxess has put its custom manufacturing business into a separate subsidiary called Saltigo, although the German company maintains that the move is not a prelude to a sale.

Clariant says its sale to TowerBrook will create one of the world???s largest businesses based solely on pharmaceutical fine chemicals. The new company will have about 800 employees; plants in Italy, Germany, the U.K., and the U.S.; and headquarters in Frankfurt am Main, Germany.

TowerBrook Managing Director James Harrison says the Pharmaceutical Fine Chemicals business is well-positioned to benefit from what he calls an increasing trend to outsourcing. "Together with management, we plan to grow the business through new capital investment and through appropriate acquisitions," he says.