Selling pigments

Staines, UK-based Elementis has agreed to sell its Global Pigments business headquartered in East St. Louis in the US to Rockwood Specialties Group for $140 million (£70 million) in cash.

Elementis Pigments is a producer of synthetic iron oxides and complementary products.

In the year ended 31 December 2006, Pigments' reported operating profit, before exceptional items, was £6.1 million on sales of £94.2 million with net assets of approximately £42 million, excluding cash and debt. Gross assets were approximately £61 million.

After taking account of transaction costs and estimated net assets at the time of completion, Elementis expects to record a pre-tax gain on sale of approximately £20 million. The gain will be recorded as an exceptional item in the 2007 financial statements.

The price represents a multiple of 2006 operating profit (earnings before interest and tax) of 11.5 times.

Completion is subject to regulatory approvals, including a filing under the Hart Scott Rodino Act in the US, and is expected to take place before the end of 2007.