Ingevity Corporation has recently announced a definitive agreement to sell its North Charleston crude tall oil (CTO) refinery assets and the majority of its performance chemicals industrial specialties product line to Mainstream Pine Products, LLC. The all-cash transaction is expected to result in net, after-tax proceeds at closing of approximately $110 million, with a potential contingent payment ranging from $0 to $19 million, subject to the achievement of future business performance milestones.
The transaction is anticipated to reduce portfolio volatility, strengthen Ingevity's margin and cash flow profile, and enhance future strategic optionality. It is also expected to have a significant impact on the company's financials. In 2025, the revenue associated with the combined assets being sold is projected to be approximately $130 million, with EBITDA margins in the low-to-mid single digits.
Following the completion of the transaction, the combined assets being sold will be reported as discontinued operations beginning with third-quarter reporting. This shift is likely to have implications for Ingevity's financial reporting and performance metrics.
In conjunction with the third-quarter 2025 results, Ingevity will update its full-year 2025 guidance to reflect the impact of classifying the combined assets being sold as discontinued operations. Ignoring the impact of this reclassification, the company affirms previously provided full-year guidance of sales between $1.25 billion and $1.40 billion and adjusted EBITDA between $390 million and $415 million.
Ingevity President and CEO, Dave Li, expressed that the transaction marks a significant milestone for the company, enabling them to accelerate deleveraging and provide additional capital allocation flexibility. He emphasized that the company continues to focus on sustainable growth and profitability as they move forward.
The CTO refinery assets being acquired by Mainstream Pine Products are co-located on the campus of Ingevity’s North Charleston, South Carolina, performance chemicals manufacturing facility. However, the transaction is not expected to impact the production of Ingevity’s road technologies product line nor certain lignin-based dispersants that are manufactured at the North Charleston plant.
As part of the transaction, Ingevity and Mainstream will enter into a series of agreements, including a supply agreement whereby Mainstream will supply certain refinery products to support Ingevity’s road technologies product line. Additionally, the companies will enter into a toll-manufacturing agreement whereby Ingevity will utilize its non-refinery assets in North Charleston, South Carolina, to derivatize certain industrial specialties products for Mainstream. There will also be a reciprocal plant operating agreement under which Ingevity will provide certain critical operating services to Mainstream at the North Charleston CTO refinery post-closing.
This strategic divestiture is anticipated to significantly mitigate Ingevity’s exposure to CTO volatility, and both companies are optimistic about the mutually beneficial relationship that will result from this transaction.
As Ingevity moves forward with this divestiture, it remains committed to its mission of providing products and technologies that purify, protect, and enhance the world around us. The company operates in three reporting segments: performance materials, which includes activated carbon; advanced polymer technologies, which includes caprolactone polymers; and performance chemicals, which includes specialty chemicals and road technologies. Headquartered in North Charleston, South Carolina, Ingevity operates from 31 countries around the world and employs approximately 1,600 people. As a result of these announcements, the company's shares have moved -1.13% on the market, and are now trading at a price of $57.89. For more information, read the company's full 8-K submission here.
