Advertisement

If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.

ENJOY UNLIMITED ACCES TO C&EN

Polymers

Kraton looks to sell polyisoprene business

Sale is part of a plan to cut costs and trim debt

by Alexander H. Tullo
February 21, 2019 | A version of this story appeared in Volume 97, Issue 8

 

A photo of polyisoprene latex gloves.
Credit: Kraton
Polyisoprene is commonly used to make medical gloves.

Seeking to recover from a sharp drop in its stock price last year, Kraton is exploring the sale of its Cariflex polyisoprene business.

Polyisoprene is used as a nonallergenic substitute for natural latex in products such as condoms and surgical gloves. The business generated 2017 sales of $168 million, about 9% of Kraton’s total. Most of Kraton’s sales come from styrenic-block copolymers and pine chemicals. “Cariflex for the most part is a stand-alone business at Kraton, with minimal revenue or cost overlap with our polymer and chemical segments,” CEO Kevin M. Fogarty says. The business’s strong growth prospects are not reflected in Kraton’s stock price, he says, and it might fit better with another company. Last year was a tough one for Kraton. The company’s stock price tumbled from highs near $50 in September to less than $20 in December as trade woes and recession fears gripped financial markets. Additionally, the company suffered a two-month outage at a pine chemical facility in Panama City, Florida, due to Hurricane Michael in October. Kraton has also been cutting costs to reduce debt stemming from its 2016 acquisition of the pine chemical maker Arizona Chemical for $1.4 billion. If Kraton succeeds in selling the Cariflex business, it will use the proceeds to pay down debt, the company says. The disclosure of the possible sale was accompanied by the announcement of a $50 million share-buyback program. Shareholders were pleased by the announcements. Kraton’s stock price jumped nearly 21% on Feb. 19, the day of the disclosures, to $36.37 per share at the close of trading.

Article:

This article has been sent to the following recipient:

0 /1 FREE ARTICLES LEFT THIS MONTH Remaining
Chemistry matters. Join us to get the news you need.