Elementis (LON: ELM) shares rose sharply on Tuesday, currently up more than 12%, after the specialty chemicals group announced the completed sale of its Talc business to IMI Fabi for $121 million and unveiled plans for a $50 million share buyback programme.
The transaction, which delivers net cash proceeds of approximately $55 million, follows a strategic review launched in August 2024.
Elementis said it believes the sale “represents the best outcome for all stakeholders,” with all Talc-related assets, liabilities, sites and employees transferring to IMI Fabi.
Following a short transitional period, the Talc business will operate under Mondo Minerals and other IMI Fabi brands.
Chief Executive Luc van Ravenstein, appointed in April, described the sale as “a new chapter in the Group’s transformation into a pure-play specialty chemicals leader,” allowing Elementis to concentrate on its high-margin Coatings and Personal Care units.
The divestment is expected to boost the Group’s adjusted operating profit margin by roughly 240 basis points, based on 2024 results, and help accelerate Elementis’ 2026 financial targets.
In addition to the sale, the board announced its intention to launch a $50 million share buyback programme. It is expected to begin “as soon as practicable.” The company’s dividend policy remains unchanged.
Elementis reaffirmed its positive outlook for the financial year, in line with its Q1 trading update issued on April 29.
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