Ingevity Corporation NGVT has agreed to divest its North Charleston crude tall oil (CTO) refinery assets and the majority of its Performance Chemicals Industrial Specialties product line. A definitive agreement has been entered into with Mainstream Pine Products, LLC for the same.
The transaction is expected to generate roughly $110 million in cash proceeds. It also entails a contingent payment ranging from $0 to $19 million, depending on the future business performance. Being subject to customary and agreed-upon closing conditions, the transaction is expected to close by early 2026.
The transaction is aimed at reducing portfolio volatility, strengthening margin and cash flow profile and enhancing future strategic optionality. The cash proceeds will facilitate deleveraging and make future capital allocation decisions more flexible.
Although the CTO refinery assets to be sold are co-located on the same campus as Ingevity’s Performance Chemicals manufacturing facility in North Charleston, SC, it will not impact the production of the Road Technologies product line or the lignin-based dispersants that are manufactured at this plant. It will rather facilitate the series of arrangements that NGVT will enter with Mainstream, such as supplying certain refinery products to Ingevity, collaborating on toll manufacturing and plant operating services while ensuring a sustainable approach.
Per the guidance provided with its second quarter results, adjusted EBITDA had been reaffirmed to be between $390 million and $415 million. Sales estimates were reaffirmed at between $1.25 billion and $1.40 billion. The third quarter results will now reclassify the combined assets being sold as discontinued operations. NGVT will provide its updated full-year guidance along with the third quarter results to reflect this impact.
NGVT stock has gained 76.7% over the past year compared with the industry’s 0.4% decline.
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NGVT’s Zacks Rank & Key Picks
NGVT currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are The Mosaic Company MOS, Carpenter Technology Corporation CRS and Avino Silver & Gold Mines Ltd. ASM. MOS and CRS sport a Zacks Rank #1 (Strong Buy) each at present, while ASM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MOS’ 2025 earnings is pegged at $3.17 per share, indicating a rise of 60.10% from year-ago levels. The company’s earnings beat the consensus estimate in one of the trailing four quarters while missing it in the rest. Its shares have gained 32.5% in the past year.
The Zacks Consensus Estimate for CRS’ current fiscal-year earnings is pegged at $9.51 per share, indicating a 27.14% year-over-year increase.Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.38%. CRS’shares have surged 81.5% in the past year.
The Zacks Consensus Estimate for ASM’s current-year earnings is pegged at 11 cents per share. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 141.67%. ASM shares have jumped 350.1% in the past year.
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