Ashland Inc. completed its acquisition of privately owned International Specialty Products Inc. (ISP), a global specialty chemical manufacturer of functional ingredients and technologies. The purchase was an all-cash transaction for $3.2 billion, subject to post-closing adjustments for changes in net working capital and certain other items.

“This defining transaction is expected to be immediately accretive and will significantly expand our position in higher-margin, higher-growth end markets, including personal care, pharmaceutical, food and beverage and energy,” said James J. O’Brien, Ashland chairman and chief executive officer. “We are excited about combining ISP’s technologies and capabilities with our own. This acquisition enhances our ability to satisfy the increasing global demand for more technologically advanced consumer and industrial products, and to continue to generate industry-leading innovation and solutions for our customers.”

ISP will be integrated into the Ashland Aqualon Functional Ingredients commercial unit, more than doubling the size of Ashland’s highest-margin business. Effective immediately, the combined unit will be called Ashland Specialty Ingredients. Going forward, Ashland Specialty Ingredients is expected to contribute roughly half of Ashland’s EBITDA. In addition, approximately half of Ashland’s overall revenues will now be derived outside of North America.

An integration team with key representatives of both companies is being led by John Panichella, president of the new Ashland Specialty Ingredients business. Ashland anticipates approximately $50 million in annual run-rate savings by the end of the second year through eliminating redundancies and capturing operational efficiencies.

“The addition of ISP greatly expands the breadth of our technology platforms and provides new resources and capabilities to better capitalize on market opportunities,” added Panichella. “In particular, we now can offer our customers one of the broadest, most functional portfolios of water-soluble polymers in the world.”