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Activist investor seeks seats on Ashland’s board

Cruiser Capital says it wants to oversee the specialty chemical maker’s improvement program

by Alexander H. Tullo
November 4, 2018 | A version of this story appeared in Volume 96, Issue 44


A pie chart showing Ashland's sales.
Special sauce
Specialty ingredients is Ashland's largest business.
Note: Sales are for the 12-month period ending June 30, 2018. Source: Ashland

Activist investment company Cruiser Capital Advisors has nominated four former chemical industry executives to serve on the board of specialty chemical maker Ashland Global Holdings. Cruiser says the nominees would help make Ashland more profitable.

Cruiser has a 2.5% stake in Ashland that is worth about $120 million.

One Cruiser nominee is William Joyce, who has served as CEO of Hercules, Union Carbide, and Nalco. Ashland acquired Hercules about a decade ago.

The others are Allen Spizzo, the former chief financial officer of Hercules; Pat Gottschalk, a former Dow Chemical executive; and Carol S. Eicher, past CEO of Innocor.

Cruiser hasn’t divulged many particulars about its desires for Ashland. However, last year, Spizzo and Eicher joined the board of the plastics compounder A. Schulman after Cruiser accrued Schulman stock. LyondellBasell Industries acquired Schulman soon thereafter.

“Cruiser Capital wants to help ensure success by bringing world class executives to the board to support the efforts of Ashland’s transformation from a conglomerated holding company structure to a streamlined, pure-play, specialty chemical company,” the investor said in a letter to Ashland’s management.

Cruiser says Ashland could increase before-tax earnings from the current $575 million to more than $800 million.

Ashland was once a far-flung company with holdings in chemicals, chemical distribution, motor oil, water treatment, refining, and asphalt. It shed businesses over several years to focus on chemicals, a process that concluded in 2016 with the spin-off of Valvoline. Last year, the company bought the natural ingredients maker Pharmachem Laboratories for $660 million.

Ashland points out that it has added five new directors to its 11-person board over the past three years. One of them is former Rohm and Haas executive Jerome A. Peribere, who was nominated last year on Cruiser’s recommendation. Moreover, Ashland says it expects to achieve $120 million in cost savings by the end of next year. Analysts hold positive views of Ashland. For example, in a note to clients last month, Credit Suisse’s Christopher Parkinson remarked that “the Ashland bull thesis appears fully intact.”


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