Core Insights - Ingevity Corporation (NGVT) has completed the divestiture of its North Charleston Crude Tall Oil (CTO) refinery assets and most of its Performance Chemicals Industrial Specialties product line to Mainstream Pine Products, LLC for $110 million, with potential contingent consideration of up to $19 million based on future performance [1][6]. Group 1 - The divestiture is a strategic move aimed at simplifying and streamlining Ingevity's business to enhance its position as a best-in-class specialty materials company [2]. - This transaction allows Ingevity to optimize its portfolio and reallocate capital and resources towards higher growth areas, particularly focusing on Pavement Technologies and other lignin-based dispersant products [3][6]. - Over the past year, NGVT's shares have increased by 57.9%, significantly outperforming the industry average growth of 0.8% [3].

Business Transformation & Strategy - Ingevity is simplifying its business by exiting Industrial Specialties, Advanced Polymer Technologies (APT), and Road Markings [11, 12] - The company is establishing "New Ingevity" with two core businesses: Performance Materials and Pavement Technologies [12] - New Ingevity will leverage strong cash flow and divestiture proceeds to invest in organic growth, reduce debt, and return capital to shareholders [11] Financial Performance & Outlook - Pro Forma 2025E Revenue for New Ingevity is approximately $900 million [14] - Pro Forma 2025E EBITDA is approximately $335 million, with an EBITDA margin of approximately 37% [14] - The company expects to generate over $200 million of free cash flow per year in 2026 and 2027 [71] - New Ingevity projects 2027E Revenue of $940-980 million and EBITDA of $350-370 million, resulting in an EBITDA Margin of 36-39% [61] - The company aims to maintain a leverage target of 2 to 2.5x [71] Segment Specifics - Performance Materials expects 2025E revenue of approximately $600 million with EBITDA margins exceeding 50% [27] - Pavement Technologies expects 2025E revenue of approximately $300 million with EBITDA margins of 33% [49] Capital Allocation - The company plans to use divestiture proceeds to repurchase approximately $300 million of shares over the next 2 years [75]