Investor Update

Aug 8, 2019

Greetings and welcome to the Huntsman Corporation sale of Chemical Intermediates And Surfactants Businesses Conference Call. At this As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Mr. Ivan Marcoosa. Thank you Ivan. May begin. Thanks, to sell our chemical intermediates and surfactants business to Indorama Ventures. We announced this agreement yesterday after the market closed via press release and posted to our website, huntsman.com. Also posted a set of slides to our website, which we will reference on the call this morning. Joining us on the call today are Peter Huntsman Chairman, President and CEO and Sean Douglas, Executive Vice President and CFO. During the call, we may make statements about our projections or expectations for the future, All such statements are forward looking statements and while they reflect our current expectations, they involve risks and uncertainties and are not guarantees of future performance. You should review our filings with the SEC for more information regarding the factors that could cause actual results to differ materially from these projections or expectations. We do not plan on publicly updating or revising any forward looking statements during the quarter. We will also refer to non GAAP financial measures such as adjusted EBITDA, adjusted net income and free cash flow. You can find reconciliations to the most directly comparable GAAP financial measures in our earnings in our earnings release that's posted on the website, huntsman.com. I'll now turn over the call to Peter Huntsman, our Chairman, President and CEO. Thank you very much, Ivan. Good morning, everyone. Thank you for taking the time to join us. Please turn to the slides we posted on our website. Last night marked another significant milestone for Huntsman as we announced the sale of our chemical intermediate business, which includes our North American PoMTB assets, our integrated oxides and glycol facilities, and our global surfactants business to Indorama Ventures for $2,000,000,000 of cash and $76,000,000 of assumed net underfunded pension obligations. On an LTM basis, this represents an EBITDA multiple of 8 times when including about $30,000,000 of retained SG which we will address over time. The multiple is closer We view this as a fair price and reflective of the quality of the assets and the talented workforce that operate the businesses We've stated over the past few years, our goal is to allocate more of our resources into more stable differentiated and complementary down stream businesses. The majority of the assets that we have agreed to sell are more upstream and capital intensive. This monetization is going to provide us the flexibility to more aggressively focus additional resources such as research and development and commercial development to our downstream businesses and to invest in and acquire assets that are more stable and cash generative, consistent with our long term strategy. The businesses that we are selling encompass 5 separate facilities, including Porton H. Texas, Dayton, Texas, Chocolate Bayou, Texas, Anchorage, India, and Botany, Australia. After the close, our core business will have $1,000,000 expenditures and $50,000,000 less scheduled turnaround maintenance spend. Earnings associated with these assets will be treated and held for sale and reported as discontinued operations starting transaction is subject to standard regulatory approvals and customary closing conditions and is expected to close near year end. There are no financing conditions. Turn to slide number 6. After the completion of this transaction, we will have net debt leverage of under one time. We will continue our balanced approach to capital allocation. Our financial priorities will be as follows: number 1, maintain an investment grade rating and strong balance sheet number 2, continue paying a competitive dividend Number 3, invest in low risk, high return organic growth projects within our existing product portfolio. An example of this is our ongoing investment in constructing a new splitter at our Geismar, Louisiana facility that will allow to upgrade £150,000,000 of crude MDI for higher value downstream applications. Number 4, pursue value creating acquisitions that are downstream or complementary to our existing businesses and number 5, continue repurchasing shares of Huntsman opportunistically. After closing, we intend to accelerate our share repurchases under our existing has approximately $600,000,000 still remaining. Let me share a few comments about our recent guidance. We do not believe will continue to target 40 percent free cash flow to EBITDA going forward. As we sit here today, I repeat as I said a week ago, that we are always a tweet away from further market volatility. The events of this past week certainly evidence that. Operator, at this time, we'd like to open the line up for questions and comments. We will now Your first question comes from Alexei Yefremov. Please go ahead. Just curious if you have a specific target or transaction in mind when you were making this divestment, should we take it as a sign that that something is imminent on the M and A side on the purchase side? No, I think that Leski, thanks for the question. I think that as we look at this, do we have a specific acquisition target, no, we do not. Have we looked at various targets and that we see, yes, we do. I think in the past, I've been quite vocal that I think, asset prices are a bit higher than they should be. And, I think that we're probably seeing a moderation some of those asset prices. But I think, again, is going over what I just talked about, about our number one priority being a strong balance sheet before we go after any particular asset that might put any strain on the balance sheet, we want to make sure that we've got the proper cash proper strength to do that. But I wouldn't say at this time that there is a single, asset that we have in our sites. Thank you, Peter. And could you just comment on anything to describe if anything prompted this transaction specifically? Was it were you shopping this business around or did the Under Armour approach? How did this transpire? We were approached by a third party, some time ago, some months ago, that was not in the Raman, And, we, over the course of a couple of months after we saw the value of the company that had approached us. We spoke to quite a few strategic players and people that we thought might be interested in this and ran I would say ran something of a process. It wasn't a formal open process, but certainly something that I consider to be a private process of companies that are already in this space or had a desire to get in this space. And I think that we we had a good global, series of companies that expressed some interest. But I think that, again, going back on common I've made over the last year, year and a half. It is a focus of this company and will remain the focus of this company to continuously look at opportunities where we can differentiate ourselves. And if we are producing products, of which we really bring no technical, no global, no ability to upstream or upvalue those products. No, I think that we will continue to look throughout our portfolio for those sort of products and, and, assess the value of those internally. And obviously, if we find somebody that has a higher value on those assets than we do, we will, we'll continue to look at our portfolio. Thank you. Your next question comes from Frank Mitsch with Fermium Research. Please go ahead. Hey, good morning and congratulations. Very nice multiple. Can you talk about your your integration, obviously, you know, propylene oxide was pretty important on a polyurethane side of things. Can you talk about your, your, how do you view your competitive position in the polyurethanes business following this transaction? Yes. Thanks Frank and good morning. Good to hear a voice. Yes, we've been selling propylene oxide, obviously, for 25, almost 30 years since we brought the Porton H's propylene oxide facility up. And I think it's safe to say is that, we believe that we have a very competitive multi year contract in place that will satisfy our needs I will be very, very, very clear on this because I read about somebody in write up earlier this morning questioning If we may have given a sweetheart deal to the buyer that would have elevated the purchase price on propylene oxide or on ethylene oxide. And I would say that on both of those, we consider those to be vital raw materials we will not disadvantaged. We have not disadvantaged our urethanes or our Aimmune business going forward. With a sweetheart deal. And I think that as we look at Indorama's ability to operate these facilities and the people and the skill sets that they are acquiring here. We feel that we're going to be very competitive position going forward. They'll have a great customer enough and we'll have a great supplier in them and we'll be competitive. All right. That's helpful. And of course, I paid attention when you were listing your priority uses of cash and you, you mentioned maintain a competitive dividend. Frankly, 3.6% is more than competitive. Should we, there there there's there's not a chance gonna cut the dividend, correct? We cut the dividend. I hope that the dividend as a percentage of the value of the stock gets cut, but we have no intention of cutting the dividend, but I'd like to see the percentage drop because the stock goes up Terrific. Thank you. Thank you. Your next question comes from Jim Sheehan with SunTrust Robinson Humphrey. Please go ahead. Thank you. I'd love to take credit for it, but it was a, it was certainly a team effort. Do you consider the remainder of the Performance Products business to be core? And also when you look at businesses that are downstream like Advanced Materials, very high value could probably fetch a much higher if you were to sell it and you're not getting sufficient credit for it in your current multiple of how do you think about the portfolio going forward after this deal? Well, I'm hopeful that, our downstream businesses like Advanced Materials and what we're seeing in those businesses exactly where we want to be taking this business on a longer term basis. And that the multiple ought to be more reflective of that. I think that as we look at our multiple, I I if you look at our multiple and what percentage of our multiple, of our EBITDA is downstream urethanes and downstream epoxies and so forth, I think that that percentage of the overall portfolio has now just risen quite dramatically. I mean, we have just sold off essentially £5,000,000,000 of production that I think is very valuable production and it's very good production. I don't mean to disparage it at all, but I think that it does dilute the downstream businesses when you have as much MTD propylene oxide ethylene oxide glycols so forth that we're producing I think that that does take some of the global way. So, I would hope that if anything, we're going to have a greater focus on our downstream businesses and that the multiple or the value of the EBITDA that is being generated by this company will be enhanced because those businesses will become more dependent on those businesses. As far as is the A means business, yes, I see a very the remaining part and the first part of your question about the remaining pieces of Performance Products, I see the Amings business is fitting in very well, particularly with our with our polyurethanes business. Amy is going to urethane catalysts, a lot of the formulations and so forth in our downstream polyurethanes and MDI businesses, I think that there is a very good fit there. I look at our Malay and hydride business. This has been a business that's This generated well in excess of 20 percent EBITDA margins for the last couple of years. We're a global leader in technology and catalyst and a low cost producer globally. We just bought in 2 weeks ago the 50% interest of our German joint venture we had with Sasol. I think at a very competitive price somewhere just under five times EBITDA. For a business that we think will just solidify our global leadership in Malay and Hydride. And I think that's that's a very core business to us. So as I look at those 2 remaining pieces of performance products, yes, I think they are very core business to us. All right. And then, you mentioned stranded costs. You can eliminate a portion of those. How much of this training class do you aim? Are you targeting right now? And how quickly can you reduce those? Well, we will have a transitional agreements here over the course of the next 6 plus months in IT and so forth. And it's obviously We've got to provide services and so forth. Endorama is not just buying a great series of assets here, but they're also expanding their North American print considerably. So, as we have an opportunity here to, cut back on some of those transitional services and so forth, we will continue to look internally as to where and how we can best manage those costs I also would just note that some of those costs are just simply costs that are embedded with the overall business If we're selling off 20 percent of the business, you don't sell off 20 percent of your board of directors, you're necessarily your IT costs, your tax costs, and so forth. So some of those costs are going to stay. Some of them will be, eliminated. And others of them, frankly, we'd like to put a large percentage of this capital into play to be able to further expand our business And these costs will also be used to, to, accomplish synergies in acquisitions going forward. So, I think when you look at that, I don't want to say that we're going to take $30,000,000 and X dollars will be cut by this date. I think it'll really be a combination of how quickly we're able to transition the business out how quickly we're able to acquire and assimilate further acquisitions and also some of those embedded costs are just going to remain with us. Thank you very much. Thank you. Your next question comes from Matthew Blair with Tudor, Pickering, Holt And Co. Hoping could you just clarify the, I guess the LTM free cash flow yield of or sorry, total free cash flow of these businesses that you sold, we have the $260,000,000 of EBITDA. And then I think you mentioned roughly $100,000,000 of of spending. So would the free cash flow be roughly $160,000,000? So, Matthew, this is Sean Douglas. Thanks for the question. We haven't provided you an LTM free cash flow for this business. We'll be doing that as we move forward and third quarter, we'll be pulling this out as a discontinued op, and you'll get some clarity around that. Generally speaking, this business has similar properties of free cash flow as does the business will manage going forward. The benefit Huntsman will have going forward is really the volatility business is a business that does incur some large multiyear turnarounds that are lumpy in terms of cash. What you'll see going forward is still this roughly the 40% target Peter alluded to in his commentary, but you'll see a little less volatility as we go forward. But I don't see the cash profile of this business changing material. Your estimate right now, I'm not going to disagree with, but at this age, we're just not giving that LTM sort of nature on the cash position until we report on the next call. Sounds good. And then slide 6 mentions the use of proceeds will include, some organic growth initiatives. You're obviously working on the MDI splitter now. Just curious if you have any other major organic projects in the hopper? Yes, at this time, we have underway 3 or 4 downstream system houses that were in the process of building and equipping. And so yes, and as we look at our Malaycan hydride, recent acquisition of our Malaycan hydride, our polyester polyols, we continue to expand those areas as well. We have the capability now as a company, which will probably be going out here soon on some public advertising of recycling upwards of 1,000,000,000 bottles a year of PET spent PET bottles. And converting that into polyester polyol that will be going into the spray foam applications. And we also have a Chinese system house, that's under construction at this point in North China. And so we, yeah, I think as we look at that downstream business, a lot of these are smaller 10 plus $1,000,000 sort of investment And I think that one of the crucial decisions, I think that went behind this, I don't mean to wonder here. But I think one of the crucial decisions that went behind this sale was when we looked at our capital allocation this past year, We had some very strong projects in surfactants that we could have done. And frankly, as we look at wanting to stay at that 40% cash generation to EBITDA, we look at the capital needs and the CapEx and so forth of the company, do we want to be putting our money into surfactant we want to be putting our money into. These are great projects, by the way, into, into, moving more and more into specialty surfactants and intermediate surfactants if you will. Or do we want to put more of our capital into downstream, you know, A means and urethanes and our, we think it's a very exciting pipeline in our epoxy resins and pre prags and so forth. And when you when you start diverting money away from good projects into your intermediates and kind of your base business, that's when you start to see that maybe this business probably would be more valuable in someone else's hands who are going to take those projects and run with them that have excellent return on those projects. And so, sorry to ramble there on the question, but I think when we start looking at capital allocation, we want to make sure that we're feeding that downstream, differentiated end of our business. Thank you. Your next question comes from Jeff Zekauskas with JP Morgan. Please go ahead. Good morning. It's silica Cook for Jeff. The remaining share repurchase is about like 600,000,000 Do you think you can complete all of that after you receive the cash at the end of the year? And do you think it would be done by the end of the first quarter of 2020? Well, I'd be surprised if we were to do all of that amount in the first quarter of 2020. Look, on our share repurchases, we are we have a program in place as we've explained to the market. We program in place that will be buying shares between now and closing, right? And I think that once we have closed once we have that cash. As we look at the market, as we look at conditions today and so forth, I think that we are going to be more aggressive do we close and after we have the cash in hand, we'll be more aggressive than we otherwise would have been in share repurchases. Now, I want to be absolutely clear as we get to the time of closing hypothetically, let's say that it's January 1. I think at that time, we've also got to look at our share price. We've got to look at it relative to our peers, multiples, and so forth. And we've got to look at the overall macroeconomic situation. If we're in the the middle, which I don't foresee happening. But if we are in the middle of a Lehman type of a 2008, 2009 meltdown, Cash is king. I think we'll probably be wanting to preserve the cash and taking a pretty conservative view on liquidity. But as we see the stock price as it was today, as it is today and so forth, I think it's a very attractive price. And I think that we would want to be buying in shares more aggressively. But I think I would be painting myself in the corner if I were to say, that 5 months from now, this is the amount of money that we're going to spend under these conditions, under this multiples with economic conditions as they are today. But, no, our intention is once we get the cash, to even more aggressively be buying and share relative to what we've been doing. Right. That's helpful. And secondly, will any of your Chinese joint ventures will be part of this divestiture? No. No, they're completely separate. And our joint venture that we have with Sinopec will remain with our polyurethanes division. And that will not be affected by this at all. Your next question comes from John Roberts with UBS. Please go ahead. Thank you and congrats as well. Does it make sense to integrate the maleic hydride and hydride business downstream into polyester alkyd resins given it's still a pretty capital. One of the attractiveness of this deal is reducing the capital intensity, but that's going to be probably your most capital intensive business, I would guess. Well, to date, our Malay business has been one of our lease capital businesses in generating about a 75% ratio to EBITDA. But, John, at this point, over the course of the next quarter we will be operating between now and the end of the year. We will be operating our Performance Products division as we are operating it today. We'll be operating it as an upstream, surfactants, maleic and Aimmune's business here over the next 6 months. But I wouldn't be surprised at near the time of closing that we'll make more specific comments around exactly how we will be the A means and the Malayic business. For the time being, we'll continue to operate it as is, but again, as we look at Malayic, I certainly would see that over time, evolving into an opportunity where we can further derivatize and add value to that. Business. Your next question comes from Hassan Ahmed with Al Ellenbeck Global. Please go ahead. Good morning, Peter. Good morning, Hassan. How are you? Very well. Thank you. Congratulations on the deal. Peter just wanted to get a better sense of the inorganic opportunities. Obviously, balance sheet as clean as clean can be, particularly post the deal. You know, just wanted to get a sense, will the inorganic opportunities you look at primarily be within the polyurethane space, And if I sort of think through that or, you know, will there be primarily within polyurethanes and complement three businesses that you have within the portfolio post the deal, or would you also venture out looking into other differentiated businesses that you're not into right now? Well, I think that just because of the the chemistry and the global reach that we have in polyurethanes. I think that that's probably going to be a very large area of opportunity and it has been in the past. But I want to be absolutely clear here. We do not have limits in saying that we are going to to not invest in this area or invest more in this area. Okay, let me correct that. We will not be getting into Polystyrene and Siery Monomers. We were 40 years ago. But as I look in, in, downstream urethanes, One area of our business I think that probably gets a little bit under notice is our advanced materials and the opportunity that we have in pushing some of the chemistry and some of the opportunities that we see in the market, into our downstream epoxies. And again, the product pie line that we have there. And I also wouldn't I don't know if I'd be interested in an entirely new leg of our business here. But as I look at things like coatings and adhesives, as I look at our elastomers businesses. And I look at the overlap that, that has within our company and what certain acquisitions in those three areas, particularly would be able to fill some of the void between what I see as our downstream epoxies, urethanes, and our A means businesses. And to some degree, even maleic in some of those downstream applications, I see a lot of opportunity down there. So I and at the end of the day, Hassane, as you know, we're opportunists And so, we'll also go where the opportunity best exists for us to create value. Understood. Understood. Very clear. As a follow-up, maybe, you know, maybe this is sort of more a question for Indorama. But, you know, since since I'm sure you spent a fair bit of time with them and had multiple discussions with them, obviously, the macro is what the macro is, there's clearly some uncertainty there. But as I as I sort of heard about this deal yesterday, you know, to me, my first knee jerk was, look, I mean, you know, there is an Asian company that's coming out here buying assets in the US. So 1st and foremost, the upstream cost advantage is very alive and very well, particularly relative to to the Asian side of things, right? Then from their perspective, you know, obviously, you guys got a great multiple, but from their perspective, you know, in one clean swoop, you know, they can they can sort of expand their network within North America quite markedly, right? So the question really that I'm getting to is that as you had discussions with them, obviously you guys got a good multiple, but from their perspective, did it also come down to a very attractive sort of balance where of sort of buy versus build, why take on the execution risk, why sort of, you know, sit there and maybe potentially have cost overruns if they were to build things out? When you can buy assets which are high quality upstream assets and straight away, you know, get the cost advantage here in North America. I mean, again, I know this is more like from an indoor a tailored to Indorama, but, you know, just wanted to, you know, whatever you could share with me about your discussions with them because I'm sure these things came up. Well, yeah, and I we've not had a great deal of interaction within the Ramba. Matter of fact, I wasn't very familiar with the company as of, a couple of months ago, and, Lokia, their, their Chairman, CEO, my counterpart there, we've become very close to this process. And I, I, it would be really wrong for somebody to think that there is a winner or loser in this transaction. I look at what they are doing. They're expanding into the U. S. Markets. They're expanding into a low cost energy platform into the largest, most vibrant economy in the world right now. I think they're picking up excellent assets. So I talked earlier, there's some wonderful projects here to invest in in the surfactants and intermediates businesses that we have today, that I think in the Rama, can't speak for them, but I would imagine it would give very, very strong consideration into investing and expanding on some of these platforms that they have. You know, and you show me a single project in the Gulf Coast. It's been built from, this has been a grassroots facility construction project, that it's coming ahead of schedule or under budget. And, and the uncertainty that that brings, I think Nirova's got they've got a great business here and they've got a great path going forward here, focused on where they want to be focused. And so I think they've got a great business. I think we've got a great opportunity to redeploy capital. And, I see this is really a win win. Fantastic. Super. Thanks so much Peter. Thank you. Thank you. Your next question comes from Arun Viswanathan with RBC Capital Markets. Please go ahead. Thanks. Good morning. Just wanted to understand how the company looks a little bit next year on an earnings power basis, you indicated that this doesn't really materially affect your guidance for this year. As you look out into next year, obviously your EBITDA is going to come down. Could you help us understand maybe the D and A associated with this business or the potential for lower interest expense as you go into next year? Yes, I think that we'd really like to be able to talk about that on our third quarter call. And, as we look at these core businesses, As I look at the core Urethanes business, particularly the downstream business, I see that as a business growing at twice the rate, greater than twice twice a rate of GDP. Our performance products, the remaining parts of that in Malaysia a means or both kind of 2 times GDP sort of growth business as Advanced Materials. If you look at the core, again, I keep shutting the spotlight back to advanced materials. But if you look over the last 2 years, 3 years, we've been exiting the commodity end of that business and we've been building the aerospace downstream differentiated into that business. And when you look at the core of that business, it continues to grow at greater than about 2 times GDP as well. And, textile effects, again, this is an industry grown at GDP, but I think that our segment of textile effects, even though we see a bit of volatility right now in the supply chain, supplying demand and inventory levels for textile effects right now. Over time, over the last couple of years, our environmentally sensitive, applications and higher end applications and textiles. We certainly have business, not only its volumes, but also its earnings growing at about twice the rate of GDP. So as I look across these businesses, they ought to be generating, I would say again, I'm looking at 2020 onwards. They ought to be generating a greater than 40% 40% -ish sort of a free cash flow to EBITDA. It ought to be growing at at least 1.5 to 2 times GDP. And we ought to be looking at margins across the board that are going to be in the high teens, pushing to 20% over the course of the next year or so. So, and we've got an opportunity to further invest and acquire and so forth to build these businesses out. So, again, I think we'd like to get into more detail in our third quarter earnings call on that as we talk about more specificity around cash flow and so forth. But as I look out over the kind of the next 2 to 3 years, on a macro basis. We feel very good about this core and it's just a great foundation to build on. Arun, you asked a question about asked a question about interest expense or debt. I would just say that there's a little bit of pre payable debt that we can play around with when this happen. So call it about $400,000,000 of prepayable debt, but the rest of it is pretty cost prohibitive. And I think we've stated that we would prefer to keep our multiple net leverage of, call it, two times roughly as we go forward. So there's no intent to really take out some of those long term notes as we close on this transaction. Okay, that's helpful. And then just as a quick follow-up, maybe you can just give me your thoughts on potentially accelerating share repurchases and reiterate your thoughts there, basically, would you want to accelerate those in order to offset any dilution that could happen from this transaction? Thanks. Yes. I mean, again, I think as we look at the time of closing and as I look kind of 5 month down the road here, I think that we need to carefully assess where the macro economy is. We need to carefully assess where share prices and where it is relative to others, what I would consider to be our peers in the industry. And again, I think that if our economic conditions or anything like they are today, outlook standing like it is today and our multiples anything like it is today really relative to our peers. I think we will be aggressively looking at share buybacks. Thanks. Your next question comes from Neil Kumar with Morgan Stanley. Please go ahead. Great. Thanks. It looks like that LCM EBITDA for the divested businesses has fallen close to 30% year over year. I know you gave a couple of years of pro form a financials, but I was just curious if you had a sense of the through cycle EBITDA for the businesses just over a longer term horizon? Are you talking about the business that's sold or the business that remains? Yes. So I don't think we published that out there for many people to see. We have an LTM EBITDA about $2.60 a fiscal year of about $300,000,000 think of that 2018 number of probably a more cycle average, EBITDA. But other than that, we haven't given you more detail historically. That's helpful. And then just as a follow-up, the businesses you sold had slightly higher margins than the consolidated business. So is there anything you can do to maybe offset the slight margin dilution for the deal? Yes, we can look at controlling the retained SG and A that we have focusing on getting the products that are in our pipeline out into the market and raising prices and looking at multi expansion of downstream manufacturing opportunities and smart acquisitions that enhance our cash flow and our margins. I do just want to say some of those. I mentioned about acquisitions. I don't feel that we as a company have to go out and on the acquisition front. I don't feel that we need to be out to prove that we can spend as quickly as we can sell. And I think that we're going to take a very prudent approach to acquisition opportunities. I think that we need to make sure that it is stated in the past that we want to make sure there's an opportunity for synergies that it's going to be very quickly, if not immediately accretive and that it makes a great deal of sense. It took us years to get to this point where we have the balance sheet that we have. I think that we need to be very smart with that. So I don't want people coming back from this call thinking that next week, we're going to be, announcing a big acquisition or something of that nature. I think we need to be very, very smart and very prudent with this. And That might mean that if we're heading into a global recession here in the next couple of quarters, maybe that's the time to preserve your capital and also wait for asset prices to cool down a little bit. But, sorry about the rambling comment here, but I think it's important I don't want people to come away thinking that we feel compelled to go out and buy something just because we have the cash here. Thank you. Thank you. The next question comes from P. J. Juvekar with Citi. Please go ahead. Hi, good morning. This is Eric Petrium for P. J. If I recall correctly, I think the Surfactant's business sale in Europe to Innospec was done above 9 times. So curious your thoughts as to live lower multiple with the integration in U. S. Feedstock advantage? Well, I think that when you look at the overall multiple on more, well, look, I think that as we look at Europe, This is 9 times Europe was about 9.5 times or so. I think they're both about the same. Europe was just a completely different, it was smaller. It was more focused into surfactants. It didn't include a lot of the glycos and oxides and olefins, I think completely different animal, if you will. And I think looking back on it, that was the right divestiture at the right time. And I think this is the right one at the right time. So I think that, yes, I think that there is a segment of what we're selling here that's a small percentage, that certainly is a minority of the overall volume that would be somewhat kind of complementary to what we did in Europe, but, totally different size and totally different portfolio. And I would just add, if you treat stranded costs, retained costs equally on an apples to apples basis, multiples are pretty much similar. Okay. Thanks for that color. And then, Peter, you've always been active on the M and A side with your acquisition of Rockwood TiO2 and pigments business, Clariant's merger. So with this deal, do you think you've become more attractive or less attractive in a potentially strategic deal going forward? Good question. Just my personal opinion, I think we probably come more attractive for opportunity. I think that whenever you've got a balance sheet that we have and you've got greater downstream focus and so forth as we have a portfolio that is perhaps a little bit leaner and more focused simplicity does, I think, matter. Yes, so I would say that this certainly would open the doors to any number of opportunities for us. Thank you. And operator, I think we'll take one more question here. We're cognizant of people's times and competing interests. Thank you. The last question comes from Mike Lihed from Barclays. Please go ahead. Thanks. Good morning and congrats Peter on the transaction. I guess going back to one of the earlier questions on the genesis of the deal, was the mix of of businesses or reflection of what the original 3rd party want to purchase? Or I guess, how did you decide the exact business split you're going to divest? Because it's a bit of different intermediate assets in the combination here? Well, the original interest was around specifically around our Port Natchess facility. And, as you look at ways you potentially could carve up carve out POMTBE or if you look at the overall facility, it became very evident to us and has been for some time that if you sell the majority of the Porton Asia site, you sell the entire site because it's so interwoven with each other. And if you're going to do that, then you look at where are you taking the ancillary facilities that complement this and you kind of very rapidly come to a conclusion of the locations in India, Australia, even though they're not physically or even a supply chain attached to portnatures, the end product customers, applications, technologies, know how, chemistry are all very similar. And So, I think that it comes up with a very clean, package share. So, yeah, that had, I think when we approached initially by a third party, it really encompassed all of what we have today. Got it. That's super helpful color. And then when you gave updated guidance last week, what were you assuming for EBITDA contribution of these businesses in 2019? Well, I'm not sure that we broke that out at the time of the call and, but I would say again that as we look at 2019, the guidance that we gave around our Performance Products business, pretty much, I think, related to these. We've seen a little bit of of a weakness in the glycols business. And I think that we've seen a fairly robust and fairly strong margins assistant margins last couple of months here on MTBE. I think we called that out in our call. And I think we continue to stand by that. Great. Thank you for joining us on our call. And if you have any follow-up questions, please reach out, to Investor Relations and we will, happily take your call. You may disconnect your lines at this time. Thank you for your participation.