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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
October 26, 2018

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

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 assist Ashland managers in making the company more profitable.

Cruiser has a 2.5% stake in Ashland, 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. Today, Joyce is vice chairman of Fermi Research Alliance, which operates Fermilab, and is a director of the specialty chemical maker Hexion.

The other nominees 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 and a former executive at Dow, DuPont, and Ashland.

Cruiser hasn’t divulged many particulars, as activist investors often do, about its desires for Ashland. Last year, Spizzo and Eicher joined the board of the plastics compounder A. Schulman after Cruiser accrued Schulman stock. LyondellBasell Industries later acquired Schulman for $2.3 billion.

“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.

It adds that the company 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 has been shedding businesses over the years to focus on chemicals, a process that concluded in 2016 with the spin-off Valvoline.

Ashland generated $3.7 billion in sales for the 12-month period ending in June. About two-thirds of its sales come from ingredients for markets such as personal care, nutrition, adhesives, coatings, and construction. 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 board over the past three years. Moreover, it says it expects to achieve $120 million in cost savings by the end of next year.


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