New York – Eastman Chemical Co. is selling its tire additives business to New York-based private equity firm One Rock Capital Partners, the companies announced 9 June.
With over 500 employees, seven production sites and two technology centres worldwide, the unit principally supplies insoluble sulphur, anti-degradants and post-vulcanisation stabilisers.
"Eastman's tire additives business is the global leader, known for high-performance, mission-critical products and technical leadership,” said Tony Lee, managing partner of One Rock.
Post-acquisition, One Rock will aim to further strengthen the product portfolio and drive growth as an independent company, according to Lee,
One Rock claims to have "a proven track record" in establishing former corporate subsidiaries as standalone businesses, and providing the resources needed to develop them.
"One Rock's reputation for innovation and quality across its portfolio aligns well with our strategic focus," said Gunes Celik, VP and general manager of the tire additives business.
The transaction, financial details of which were not disclosed, is expected to be completed in the second half of 2021.
As ERJ reported in April, Eastman was exploring options for the tire additives unit, despite signs of recovery in the automotive market.
For 2021, Eastman forecast “continued competitive pressure in markets for tire additives to negatively impact its financial results.
In 2020, a drop in forecast sales and earnings at the tire additives unit led Eastman to cut its ‘estimated fair value’ by $50 million – so that, as of 31 Dec, ‘goodwill allocated’ to the unit was $725 million.
The downgrade was linked to “weakened demand in ‘transportation’ markets due to the global pandemic and competitive pricing pressures as a result of global capacity increases.”