Material Manufacturing Spin-off to break away from Huntsman Corp. in IPO
Companies today are going green because that’s what consumers are asking for. Customers today do not only appreciate the quality of your product like in the past, they also want to know where you source your materials, whether your product is eco-friendly, whether your sourcing is sustainable. Various firms have taken advantage of this new consumer market to0 get an edge over their competition, among them Venator Materials PLC.
With over 4,500 employees under its belt and a continental reach within North America, Venator PLC is fast becoming a global player in the chemical product market. Venator is a subsidiary of the internationally renowned Huntsman Corp. (NYSE: HUN).
Venator Materials offers various services to help their customers get their buildings back in shape. Though it offers many services, the two main revenue earners for the firm are divided into two groups. The first group is the pigmentation division. Venator Materials is widely known to its customers for its titanium oxide-based pigments which make for attractive building material. For those who find this option a bit pricey, Venator also offers cheaper iron oxide pigment options. The second service that Venator gives is performance additives. Under this division, Venator does everything from curing timber to treating water to obtain perfect building finishes.
Huntsman CEO Peter Huntsman said that he had considered spinning off one of its divisions to Venator beginning of 2017. When the titanium oxide market improved after tanking for two years, he decided on an IPO for the chemical industry-based company would be more beneficial.
Venator Materials PLC plans to list on the NYSE under the stock label VNTR. The company neither disclosed the pricing terms for its initial offering nor the number of shares on offer. It did however state that they would be common shares. The estimated IPO size for the firm is $100 million. Only BofA Merrill Lynch will guide Venator through the IPO.
The IPO for the manufacturing giant looks promising because the financials for the company are impressive. Venator Materials was only incorporated in 2017. However, the firm recorded a $2.3 billion sales revenue value for the twelve months ending March 31st, 2017. The net income from the newly minted firm was $42 million for the same period.
Another variable that Venator Materials has going for it are favorable growth projections. Huntsman Corp. CEO described the titanium-oxide market that the firm operates in as ‘steadily growing’. He also hinted that Venator would put more products on the market soon. The compounded effect of the company’s upward trend along with the market’s make Venator’s IPO success even more plausible.
According to the company’s management, any money from the IPO will help Venator to move its headquarters from the US to the UK. This move would enable the firm to separate its operations from those of Huntsman Corp. Similarly, a shift to the UK would allow Venator Materials to lower its production costs. That’s because Venator would be taxed less. If any money remains, Venator will use it like any other comapny: to fund operations and sniff out M&As.