Ashland, maker of Valvoline motor oil, agreed to buy closely held International Specialty Products for $3.2 billion to tap demand for higher-margin ingredients used in personal-care products and pharmaceuticals.
The all-cash purchase of ISP is expected to add to earnings immediately after closing, which should occur by September, Covington, Ky.-based Ashland said Tuesday. The acquisition will be funded with cash and committed bank financing, Ashland said.
Ashland chief executive James O’Brien has been shedding commodity units and acquiring more profitable businesses since he sold the company’s stake in an oil-refining venture almost six years ago.
So-called specialty chemicals will account for 74 percent of profit after the ISP purchase, Ashland said. ISP makes fixatives for hair gels; anti-wrinkle ingredients; clarifiers for beer and wine; and chemicals that speed the release of drug ingredients.
Ashland rose $7.30 to $68.34 in New York Stock Exchange composite trading.
