K+S Group, Kassel, on April 30 completed the sale of its Americas salt business consolidated in the Operating Unit Americas to the U.S’.-based Stone Canyon Industries Holdings LLC (SCIH), Mark Demetree and partners.
Late last month, the U.S. Department of Justice gave the go-ahead for the sale (GM April 23, p. 34). U.S. antitrust clearance of the deal was seen as “the main step K+S had to take between signing and closing”(GM Nov. 13, 2020).
K+S put the Americas unit enterprise value at $3.2 billion corresponding to 13.4 times the 2020 EBITDA of $239 million
It said taking into account debt and cash, the purchase price is now approximately €2.6 billion (approximately $3.1 billion at current exchange rates), and that this payment was made April 30 entirely in cash.
The Americas operating unit mainly comprises Morton Salt (USA), acquired by K+S in 2009 for $1.675 billion (GM April 6, 2009), and K+S Windsor Salt (Canada), also acquired in 2009. The unit also comprises K+S Chile, formerly known as the Chilean company SPL, acquired by K+S in 2006.
With the completion of the sale of the Operating Unit Americas, K+S said it has implemented the most important component of the package of measures announced in December 2019 (GM Dec. 13, 2019) and is an important milestone in the company’s planned reduction of its debt.
K+S said the net proceeds equivalent to around €2.6 billion will be entirely used to successively reduce company debt, and, accordingly, the level of debt (net financial debt/EBITDA) will “improve significantly,” it said.
K+S’ net debt-to-EBITDA ratio had deteriorated to 7.2x as of Dec. 31, 2020, compared with 4.9x at the end of 2019.