Ashland to Acquire International Specialty Products Inc. (ISP); Broadens Global Leadership in Specialty Chemicals

Ashland Inc. and International Specialty Products Inc. (ISP) have informed that Ashland has agreed to acquire privately owned ISP, a global specialty chemical manufacturer of innovative functional ingredients and technologies. Under the terms of the stock purchase agreement, Ashland will pay approximately $3.2 billion for the business in an all-cash transaction. At closing, ISP’s advanced product portfolio will expand Ashland’s position in high-growth markets such as personal care, pharmaceutical and energy. For the 12 months ended March 31, 2011, ISP generated sales of approximately $1.6 billion and earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $360 million. The transaction is expected to be immediately accretive to Ashland’s earnings per share.

ISP is a leading global supplier of specialty chemicals and performance enhancing products for consumer and industrial markets. ISP will bring high-value water soluble polymers and other advanced technologies into Ashland’s functional ingredients business, as well as complementary additives for Ashland’s food and beverage, energy, coatings, adhesives and water treatment markets. The acquisition is expected to significantly strengthen Ashland’s functional ingredients active patent portfolio and its team of research and development scientists. The result will be a stronger, global functional ingredients business with proven technological and application capabilities to solve customers’ unique formulation challenges.

Ashland Chairman and Chief Executive Officer James J. O’Brien said, "This defining transaction enables us to significantly expand our market positions in higher margin, higher growth and less cyclical global markets like personal care and pharmaceuticals. In addition, we expect to more than double the size of our highest-margin functional ingredients business."

ISP President and Chief Executive Officer Sunil Kumar said, "We are very enthusiastic about the opportunity to combine ISP with Ashland. We appreciate Ashland’s passion for this business and we believe this combination offers tremendous potential for our customers, key business partners and employees."