Ingevity (NGVT) has disclosed a new risk, in the Corporate Activity and Growth category.
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Ingevity’s strategic repositioning of its Performance Chemicals segment, announced on November 1, 2023, and July 31, 2024, involves significant operational changes, including the closure of plants in DeRidder, Louisiana, and Crossett, Arkansas. This initiative aims to improve profitability and reduce cyclicality by decreasing exposure to lower-margin markets, impacting approximately 45% of the industrial specialties product line’s historical net sales. However, this transition is expected to incur substantial charges totaling approximately $350 million, of which $250 million are non-cash, potentially affecting the company’s financial health and operational outcomes. The anticipated financial implications are subject to various assumptions and risks, with the possibility of unforeseen material charges arising, which could further strain Ingevity’s financial condition during this period.
The average NGVT stock price target is $47.75, implying 14.26% upside potential.
To learn more about Ingevity’s risk factors, click here.