Ashland To Buy Pharmachem Labs For $660 Mln

(RTTNews) - Ashland Global Holdings Inc. (ASH) said that its subsidiary has signed a definitive agreement to acquire privately owned Pharmachem Laboratories Inc., a provider of quality ingredients to the global health and wellness industries and high-value differentiated products to fragrance and flavor houses.

As per the terms of the stock purchase agreement, Ashland will pay $660 million in an all-cash transaction that is expected to be completed before the end of the June quarter. The acquisition, which is subject to customary closing conditions and required regulatory approvals, will be funded with bank financing and available cash. The acquisition is expected to be accretive to Ashland's earnings per share in the first year following the close of the transaction.

The all-cash purchase price of $660 million represents a transaction multiple of ~10.5x Pharmachem's estimated fiscal 2017 adjusted EBITDA or ~7.5x after adjusting for expected cost synergies and tax optimization.