Ashland to purchase ingredients firm Pharmachem for $660m

Specialty chemicals firm Ashland has entered into a definitive agreement to purchase fragrance and flavour ingredients provider Pharmachem Laboratories for $660m.

Pharmachem operates 14 manufacturing facilities in the US and Mexico for the development, manufacture, and supply of fragrance and flavour products for use in consumer products such as fine perfumes and laundry detergents. The company also supplies products to personal care, nutrition, health, food, and beverage markets.

Ashland's chairman and chief executive officer (CEO) William Wulfsohn said: "The acquisition of Pharmachem offers a number of exciting growth opportunities in higher-margin end markets, while also strengthening our specialty product line.

"This combination will enhance our position in fast-growing nutraceutical end markets, open a new opportunity within fragrances and flavours, and strengthen Ashland's food ingredient business by adding customised functional solutions."

With the combined capabilities, Ashland expects to achieve meaningful cost and tax synergies driven by the integration of Pharmachem into the company’s global business structure.

Pharmachem's CEO Colin MacIntyre said: "We have the opportunity to create something unique in our industry by combining Pharmachem's custom manufacturing capabilities with Ashland's formulation knowledge and excipients expertise.

"Together we can drive the next phase of Pharmachem's growth while contributing to Ashland's vision of creating the world's premier specialty chemicals company."

Subject to customary closing conditions and requisite regulatory approvals, the acquisition is estimated to be completed by the end of June.