Ashland Inc. announced that its wholly owned subsidiary, Valvoline Inc., has filed a registration statement with the Securities and Exchange Commission (SEC) for an initial public offering (IPO) of up to 20% of its common stock. Valvoline is the second largest quick-lube chain and the third largest passenger-car motor oil brand in the U.S.A.
In addition, Ashland has filed a proxy statement/prospectus for a proposal to reorganize Ashland Inc. under a new public holding company, Ashland Global Holdings Inc., and register the shares of Ashland Global Holdings Inc. with the SEC.
These filings mark a significant milestone in Ashland’s previously announced plan to separate into two independent, publicly traded companies: Ashland Global Holdings Inc., composed of Ashland Specialty Ingredients and Ashland Performance Materials, and Valvoline Inc., composed of Ashland’s Valvoline business segment.
In April 2016, Ashland announced it would file a registration statement in mid-2016 to sell up to 20% of Valvoline Inc. common stock to the public through an IPO. Subject to sufficiently attractive market conditions, Ashland plans to complete the IPO during the fourth quarter of 2016.
Ashland currently expects that it would distribute the remaining common stock of Valvoline Inc. to Ashland’s shareholders upon expiration of the IPO lock-up, which is typically six months after completion of the IPO.
The joint book-running managers for the IPO are BofA Merrill Lynch, Citigroup and Morgan Stanley.
In connection with the separation, Ashland Inc. will be seeking shareholder approval to reorganize Ashland Inc. under a new public holding company. This reorganization will enable Ashland to reincorporate in the State of Delaware and will help facilitate a tax-efficient separation.
Ashland Inc. is a global leader in providing specialty chemical solutions to customers in a wide range of consumer and industrial markets, including adhesives, architectural coatings, automotive, construction, energy, food and beverage, personal care and pharmaceutical. Currently, Ashland has three business units – Ashland Specialty Ingredients, Ashland Performance Materials and Valvoline.
Valvoline reported annual sales of about USD 1.97 billion and operating profit of USD 359 million in fiscal year 2015, which ended on September 30. Ashland’s remaining businesses generated about USD 3.42 billion in revenue and about USD 326 million in operating income in fiscal year 2015.