This morning, Tessenderlo announced it has completed the earlier announced sale of its Compounds activities to Mitsubishi Chemical Corporation. Recall that the sale was initially announced on 27 February 2013.
The sale comprises four production sites (France, Poland and China) and one R&D site (in Belgium) with about 360 employees. Tessenderlo was mainly active in thermoplastics (made from thermoplastic elastomers and PVC) with applications in cabling, automotive, building and other industries.
The divested business generated € 124m revenue in 2012. The profit contribution was not disclosed but we expect it to have been fairlysmall (only a few m € EBITDA).
Recall that Tessenderlo already recognized a € 8.8m non-recurring loss related to this transaction in its 4Q12 results (comprising impairment charges of € -5.7m and costs to sell and other provisions of € -3.1m). The exact divestment price was not disclosed.
Our View:
The completion of the sale of the Compounds operations is no surprise. Nevertheless, it confirms the progress that the company is making with its strategic transformation. After having sold already a series of assets that were mostly operating in difficult industries, we now expect that Tessenderlo can earn some sizeable money with the key remaining asset to be disposed, which is the Plastic Pipes Systems business. Recall that also the UK profiles business is still up for sale, and we reckon on a transaction price of about € 170-190m for both businesses combined. We stick to our Hold rating for now.